Question

Dylan borrowed $2100 from the bank for 15 months. The bank discounted the loan at 2.6%. How much was the interest? $ State your result to the nearest penny. How much did Dylan receive from the bank? $ State your result to the nearest penny. What was the actual rate of interest? % State your result to the nearest hundredth of a percent.

Answer 1

Answer:

actual rate of interest is 2.08 %

Step-by-step explanation:

Given data

borrowed = $2100

time = 15 months

rate = 2.6%

to find out

interest and receive from the bank and actual rate of interest

solution

we know bank discounted the loan at 2.6%

so interest will be 2.6% of $2100

that is  = 2.6/100 × 2100

interest = $54.60

so receive from the bank  is  borrowed money - interest

receive = 2100 - 54.60

receive from the bank is $2045.40

and we can say that interest is directly proportional to time

so interest of 12 months / interest of 15 month = 12 month time/ 15 month time

here  interest of 12 months = 12/15 ×  interest of 15 month

interest of 12 months = 12/15 × 54.60

interest of 12 months is $43.68 (annually)

now we can calculate actual rate of interest

that is = interest / borrowed money × 100

actual rate of interest = 43.68/2100 × 100

actual rate of interest is 2.08 %