Question

Kala borrowed $800 from the bank for 5 years and was charged simple interest. The total interest that she paid on the loan was $240.

As a percentage, what was the annual interest rate of her loan?

Answer 1

Answer: 1.5%

Step-by-step explanation: To find the annual interest rate of Kala's loan, we need to use the following formula:

annual interest rate = (total interest / loan amount) * (number of years / 1)

Plugging in the given values, we get:

annual interest rate = (240 / 800) * (5 / 1)

= 0.3 * 5

= 1.5

The annual interest rate is 1.5, which is 150% when expressed as a percentage. This means that Kala was charged an interest rate of 1.5% per year on her loan.