Question

Andy has a credit rating of 800, and mia has a credit rating of 585. they both apply for the same loan amount from newton bank. the bank approves andy’s loan at 6.5%, and mia is charged 4 percentage points more because of her lower credit rating. what interest rate does mia have to pay?

Answer 1

10% interest rate to be paid by Mia.

What do interest rates mean?

• An interest rate indicates how expensive borrowing is or how lucrative saving is. Therefore, if you are a borrower, the interest rate is the sum you pay for borrowing money and is expressed as a percentage of the overall loan amount.
• The basic interest formula is as follows, for instance, if you take out a $20,000 loan with a five-year term and a 5% interest rate: $5,000 in interest results from multiplying $20,000 by.05 by 5.
• The nominal interest rate, the effective interest rate, and the real interest rate are the three primary categories of interest rates. The declared rate on which interest payments are computed is the nominal interest on an investment or loan.

10% interest rate to be paid by Mia.

To learn more about the rate of interest, refer to:

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