Question

Mr. Kim paid $360 in interest in one year for his $4,000 car loan. Using the formula for simple interest, what was the rate of interest? ​

Answer 1

The rate of interest is 9%.

Explanation:

Given that the formula for simple interest is I = (P×R×T)/100 where I represents interest, P is principle, R is rate interest and T is number of years. So you have to substitute the values into the formula :

`i = (prt)/(100)`

`let \: i = 360,p = 4000,t = 1`

`360 = (4000 * r * 1)/(100)`

`36000 = 4000r`

`(36000)/(4000) = r`

`r = 9`