Question

You take out a 60- day loan for $5000, at the end of the loan, you owe $73.97 in interest. What is the annual percentage rate? Round your answer to the nearest 10th of a percentRate equals interest/principle X time

Answer 1

To solve the problem we have to use the simple interest formula:

`\text{Interest = Initial Money }*\text{ Percentage }*\text{ Time}`

In this case, we have to put the time into the year format. Thus,

`\text{79.97= 5000 }*\text{ Percentage }*\text{ }(60)/(365)`
`\text{Percentage = }(79.97)/(5000*(60)/(365))=0.097296`

Answer: The annual percentage rate is 9.7%