Question

Hot Air Balloon Tours, Inc. must pay the bank $23,515.27 in interest 200 days after making a loan of $328,120 to purchase hot air balloons. What is the simple interest rate? Round to the nearest tenth

Answer 1

From the question, we have the following parameters.

`\begin{gathered} \text{Interest}=\text{ \$}23,515.27 \\ Time\text{ = 200days} \\ \text{Principal}=\text{ \$}328,120 \\ \text{Interest rate=?} \end{gathered}`

The formula for simple interest is given as:

`\text{ I=}(prt)/(100)`

Therefore, we will have;

`\begin{gathered} 23515.27=(328120*(200)/(365)* r)/(100) \\ 23515.27=(328120*200* r)/(100*365) \\ r=(23515.27*100*365)/(200*328120) \\ r=13.1\text{\%} \end{gathered}`

Answer: 13.1%