Question

The Smith family took out a $160,000 loan. After 30 years they had paid a total of 364000. What is the interest rate on the loan? Can someone pls answer this in an hour using the equation Interest= principal x rate x time.

Answer 1

Answer:

The interest rate is 0.0425%

Step-by-step explanation:

Mathematically;

I = PRT/100

From the question, I in this context is the difference between how much they have paid and the amount borrowed

Mathematically, this is ; 364,000-160,000 = 204,000

This is the interest

R is the rate = ?

T = 30 years

P is the amount borrowed = 160,000

thus, we have

204,000 = (160,000 * R * 30)/100

2040 = 4800000R

R = 2040/4800000

R = 0.000425 which is 0.0425%