Question

Matt paid $450 in interest on a 15 month note for $5600. Find the rate of interest paid.

Answer 1

Answer:

The rate is 6.43%

Step-by-step explanation:

Given

$I = 450$ --Interest

$P = 5600$ -- Principal

$T= 15\ months$ --Time

Required

Determine the rate

Using simple interest formula:

$I = PRT$

Make R the subject

$R = \frac{I}{PT}$

Convert time to years

$T= 15\ months$

$T =\frac{15}{12}\ years$

$T =1.25\ years$

Substitute values for I, P and T

$R = \frac{450}{5600*1.25}$

$R = \frac{450}{7000}$

$R = 0.0643$

Convert to percentage

$R = 0.0643*100\%$

$R = 6.43\%$