Answer:
9.1
Step-by-step explanation:
To calculate the total interest payable, we use the formula
I=P0rt,
and substituting our values yields
I=$2,400×0.08×1812=$288.
Therefore the total amount he receives at loan drawdown is $2,400−$288=$2,112. To calculate the effective interest rate, we use to formula
A=P0(1+ret).
In this instance we have A=$2,400,P0=$2,112 (redefined from the value above) and t=1.5. We substitute into the formula to get
$2,400=$2,112(1+1.5re).
Solve for re.
24002112=1+1.5re
24002112−1=1.5re
24002112−11.5=re
This gives re=0.0909⋯=9.0909…%, which is 9.1%
