Question

A 90-day simple interest loan in the amount of $2,350 will be paid in full in the amount of $2,500.

Find the rate of the loan.
O 26%
O 15 %
O4%
O 33%

Answer 1

26%

Explanation:

The amount due is ...

A = P(1 +rt)

2500 = 2350(1 +r(90/360)) . . . . using ordinary interest

2500/2350 -1 = r/4

r = 12/47 ≈ 25.53% ≈ 26%

The rate of the loan is about 26%.