To solve this problem we are going to use the simple interest formula: 
where
is the sum of the <span>interest and the principal
</span>
is the principal
is the interest rate in decimal form
is the time in years
<span>
We know for our problem that </span>
, 
, and 
. Now, let 
represents our interest rate. To express the interest rate in decimal form, we are going to divide the rate by 100%:
.
Now that we have all the values we need, lets replace them in our simple interest formula to find the interest rate:
![21000=15000[1+(0.01x)(5)]](https://tex.z-dn.net/?f=21000%3D15000%5B1%2B%280.01x%29%285%29%5D)
We can conclude that the interest rate of your cousin's loan was 8%.
where
</span>
<span>
We know for our problem that </span>
Now that we have all the values we need, lets replace them in our simple interest formula to find the interest rate:
We can conclude that the interest rate of your cousin's loan was 8%.
