Answer:
Kindly check explanation
Step-by-step explanation:
Given :
Interest amount paid on loan = $90
Principal value, amount borrowed = $500
Period, t = 16 days
The equivalent annual interest :
Using the simple interest formula :
simple interest = principal * rate * time
Using, days of year = 365
Plugging in the values into the formula :
90 = 500 * rate * (16/365)
90 = 500 * rate * 0.0438356
90 = 21.917808 * rate
Rate = 90 / 21.917808
Rate = 4.10 = 4.10 * 100% = 410%
If days of year = 360 is used :
90 = 500 * rate * (16/360)
Rate = 90 / 22.222
Rate = 4.05 = 4.105 * 100% = 405%
