Question

Suppose that you borrow $1000.00 from a friend and promise to pay back $1615.00 in 3 years. What simple interest rate will you pay?The simple interest rate is% (Round to the nearest tenth as needed.)

Answer 1

Okay, here we have this;

Considering the provided information, we are going to calculate the requested simple interest rate, so we obtain the following:

So to solve it we will substitute in the following simple interest formula, then we have:

I=Prt

(1615-1000)=1000(r)(3)

615=3000(r)

r=615/3000

r=0.205

r=20.5%

Finally we obtain that the simple interest rate is 20.5% per year.