Question

Mr. Smith borrowed $22,000 to purchase stock for his baseball card shop. He repaid the simple interest loan after four years. He paid interest of $6.260. What was the interest rate?

Answer 1

Based on the calculations, the interest rate on the stock in four (4) years is equal to 7.1%.

Given the following data:

Amount borrowed (Principal) = $22,000.

Simple interest, I = $78.40.

Time = 4 year.

To determine the interest rate on the stock in four (4) years:

How to calculate simple interest?

Mathematically, simple interest can be calculated by using this formula:

I = PRT

Where:

• S.I is the simple interest.

• P is the principal or starting amount.

• R is the interest rate.

• T is the time measured in years.

Making R the subject of formula, we have:

R = I/PT

Substituting the given parameters into the formula, we have;

R = 6260/(22,000 × 4)

R = 6260/(88,000)

Interest rate = 0.071 = 7.1%.

Read more on simple interest here: brainly.com/question/24341207

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