Question

The principal P is borrowed and the loan's future value A at time t is given. Determine the loan's simple interest rate r.

Answer 1

A = P + SI

A-P = SI

5425-5000 = 425

THEREFORE THE SIMPLE INTRESTE IS $425

SI = PTR/100

425 = 5000×1×R/100

425×100/5000×1=R

425×100÷5,000×1 = 8.5%

THEREFORE THE RATE IS 8.5%