Question

Jessica borrowed $1,500 from Angel. She agreed to repay her $2,100 after 4 years. Whatwas the interest rate of this loan?(Make sure to include the % symbol in your answer)

Answer 1

Given,

The borrowed amount is $1500.

The amount she will repay is $2100.

The time period she takes to repay is 4 years.

The interest over the 4 years is,

`\begin{gathered} \text{Interest= amount - principal} \\ \text{Here, amount is \$2100.} \\ \text{Interest is \$1500} \end{gathered}`

Substituting the values in the expression for the interest then,

`\text{Interest=2100- 1}500=600`

The interest amount is $600.

The expression of simple interest is,

`\begin{gathered} I=(P* R* T)/(100) \\ \text{Here, P is principal = 1500} \\ R\text{ is rate } \\ T\text{ is time = 4 years} \\ I\text{ is the interest amount = 600} \end{gathered}`

Subsituting the values then we get,

`\begin{gathered} I=(P* R* T)/(100) \\ \text{Here, P is principal = 1500} \\ R\text{ is rate } \\ T\text{ is time = 4 years} \\ I\text{ is the interest amount = 600} \end{gathered}`