Question

Patty wanted to borrow $20,000 for school. The interest rate is 6%. She wants to pay off the loan in 10 years. What would be the simple interest rate?

Answer 1

$12,000

Explanation:

To solve, use the PRT formula to find the interest rate.

Notes: Base formula, written as I = Prt or I = P × r × t where rate r and time t should be in the same time units such as months or years. Time conversions that are based on day count of 365 days/year have 30.4167 days/month and 91.2501 days/quarter.

Answer 2

12,000

Explanation:

20000 x 0.06 x 10