## Related questions with answers

Question

Bill Rich signed a 180-day note for $1,250. He repaid the loan when due with interest at an annual rate of 12 % using a banker's year.

Tony Colito paid$19.50 in interest on a loan of $2,600 for 1 month. What rate of interest did he pay?

Solution

VerifiedStep 1

1 of 2$\text{Interest} = \$2,600 \times \text{Rate} \times \dfrac{1}{12}\\\\ \$19.5 = \$216.67 \times \text{Rate}\\\\ \text{Rate} = \dfrac{\$19.5}{\$216.67}\\\\ = 0.09 = 9\%$

Interest = Principal x Rate x Time

Where rate is in decimals and time is in years

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