Question

24. Anton borrowed $460 for a new bicycle. He made 9 monthly payments to repay the loan. He paid $60 interest. What is his simple interest rate?
7.67%
13.0%
9.75%
10.2%
17.4%​

Answer 1

Answer:

17.4%​

Step-by-step explanation:

This is a simple interest problem.

The simple interest formula is given by:

$E = P*I*t$

In which E is the interest amount, P is the principal(the initial amount of money), I is the interest rate(yearly, as a decimal) and t is the time, in year.

In this question:

He borrowed $460, so $P = 460$

Paid $60 interest, so $E = 60$

9 months. So $t = \frac{9}{12} = 0.75$

We have to find I.

$E = P*I*t$

$60 = 460*I*0.75$

$I = \frac{60}{460*0.75}$

$I = 0.174$

So the correct answer is:

17.4%​