Question

The hemmings borrowed $3 000 for home improvements. They repaid the loan and $600 in simple interest four years later. What simple annual interest rate did they pay

Answer 1

Answer:

5%

Step-by-step explanation:

Given that:

Principal = $3000

Simple Interest paid = $600

Period = 4 years

Simple interest = principal * rate * time

$600 = $3000 * rate * 4

$600 = $12000 * rate

Rate = $600 /$12000

Rate = 0.05

Hence, simple interest rate paid = (0.05 * 100%) = 5%