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In the previous question, we determined that if you borrow $3,000 on an 8% discounted loan for 9 months, the amount you actually receive will be $2,820. Given this, what is the effective interest rate on the loan you receive? Express your answer as a percentage rounded to the nearest tenth of a percent if necessary, but do not include the percent sign.

2 Answers

4 votes
2,536 because you add and multiply
User Idalis
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6 votes

Answer: 8.5%

Explanation:

I=Prt

180=(2,820)r(3/4)

180=2,115r

R=180/2,115

r≈8.5%

The effective interest rate is approximately 8.5%, about half a percent higher than what was advertised.

User Takol
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5.3k points