Question

gil borrows $8000 for college expenses. he will pay a total of $2280 back in interest after 6 years. what was his interest rate

Answer 1

I believe it is 4.75 %

Explanation:

2,280 × 100 = 228,000

228,000 / 8,000 = 28.5

28.5/6 = 4.75 %

Answer 2

R = 41.8129%/year

Equation:

r = (1/t)(A/P - 1)

Calculation:

Solving our equation:

r = (1/6)((8000/2280) - 1) = 0.41812865

r = 0.41812865

Converting r decimal to R a percentage

R = 0.41812865 * 100 = 41.8129%/year

The interest rate required to get a total amount, principal plus interest, of $8,000.00 from simple interest on a principal of $2,280.00 over 6 years is 41.8129% per year.

Explanation: