Question

What is the rate for a loan of $5,000 that has $250 simple interest for 11 months?Round to the nearest whole percent

Answer 1

Given data:

The given principal is P=$5,000.

The given simple interest is S I = $250.

The given time is t=11 months =11/12 year.

The expression for the simple interest is,

`SI=(P* r* t)/(100)`

Substitute the given values in the above expression.

`\begin{gathered} 250\text{=}(5,000* r*11)/(12*100) \\ 300000=55000r \\ r=5.45\text{ percent} \\ \approx5\text{ percent} \end{gathered}`

Thus, the rate of interest is 5% annually.