Question

Theo borrows $8,000 for college expenses. He will pay a total of $10,280 after 6 years. What percent of interest did Theo pay?

Answer 1

9514 1404 393

Answer:

  4.75%

Step-by-step explanation:

When simple interest is charged, the payback amount is ...

  A = P(1 +rt) . . . . for annual rate r and a term of t years

Using the given values, we can solve for r.

  10280 = 8000(1 +6r)

  1.285 = 1 +6r . . . . . . . . divide by 8000

  0.285 = 6r . . . . . . . . . . subtract 1

  0.285/6 = r = 0.0475 = 4.75% . . . . . . divide by 6; express as %

Theo paid interest at the rate of 4.75%.