Elsa took out a $6000 loan for 5 months and was charged simple interest. The total interest she paid on the loan was $195. As a

Question

3 years ago

15

percentage, what was the annual interest rate of Elsa's loan?

1 answer:

vivado [14] · Answer 1 · 2022-03-19T14:50:57+03:00

Answer:

the annual rate of interest is 7.8%

Step-by-step explanation:

The computation of the annual rate of interest is as follows:

As we know that

Simple interest = Principal × rate × time

$195 = $6,000 × rate × 5 months ÷ 12 months

$195 = 25 × rate

Rate = $195 ÷ 25

= 7.8%

Hence, the annual rate of interest is 7.8%

We simply applied the above formula so that the correct value could come

And, the same is to be considered