Question

Debbie McAdams paid 9% interest on a $16,500 loan balance. Jan Burke paid $6,450 interest on a $107,500 loan. Based on 1 year:

a. What was the amount of interest paid by Debbie?
What was the interest rate paid by Jan? (Round your answer to the nearest tenth percent.)

Answer 1

Answer: See explanation

Explanation:

a. What was the amount of interest paid by Debbie?

Interest is calculated as:

= PRT

= (16500 × 9% × 1)

= 16500 × 0.09 × 1

= $1485

Debbie paid $1485 as interest.

b. What was the interest rate paid by Jan?

Interest = PRT/100

6450 = (107500 × R × 1) / 100

6450 × 100 = 107500R

645000 = 107500R

R = 645000 / 107500

R = 6.0

The interest rate is 6.0%