Question

Luke borrowed 15000 to pay his college tuition after he graduates he will repay the loan along with simple interest after 2 years luke will owe a total of 17250 what is the simplest interest rate on lukes loan

Answer 1

Answer: 7.5%

Explanation:

Given: Principal amount = $15,000

Time =- 2 years

Final Amount (Principal + interest)= $17,250

Interest = Final Amount - Principal amount

= $ ( 17250 - 15000 )

= $ 2250

Formula for interest : principal x rate x time

`2250=15000* rate * 2\\\\\Rightarrow\ rate =(2250)/(15000*2)\\\\\Rightarrow\ rate =0.075\\\\\Rightarrow\ rate =0.075*100\%=7.5\%`

Hence, the simplest interest rate on lukes loan =7.5%