Question

Mrs.Hanover borrows $1400 at a rate of 5.5% per year .how simple interests will she pay if it takes 8months to repay the loan?

Answer 1

Mrs. Hanover borrows 1400 dollars at a rate of 5.5% per year.
She paid it within 8 months only, find the interest rate that she paid.
First let’s calculate the 5.5% rate per year
=> 1400 x 0.055
=> So in 1 year, she will 77 dollars as interest.
Now, in 1 year there are 12 months., let’s divide 5.5 by 12
=> 5.5 / 12 = 0.46 per month
=> 0.46 x 8 months = 3.67% in 8 months.
Now, let’s get the interest rate
=> 1 400 x 0.037
=> 51.8