Question

Please see attachment for question . I have also have attached a identical example for reference

Answer 1

For this example we have that the annual rate of interest for a $2,267 RAL which is paid back in 29 days

We will use the next formula

`I=\text{Prt}`

Where I is the interest, P is the principal , r is the annual simple interest rate, t is time, in our case

P= 2267

t= 29/ 360

I=89

we substitute the values

`89=(2267)((29)/(360))r`

Then we isolate the r

`r=(89(360))/(2267\cdot29)=0.48735`

In percentage the rate is

`48.735\text{ \%}`

The annual rate of interest for this loan is 48.735%