Question

A loan of $8000 was paid back in 2 years in monthly payments of $400.00. The interest on the loan,as a percentage, was??

Answer 1

Answer:

(400*12*2 - 8000)/8000 * 100 = 20% profit

Step-by-step explanation:

Answer 2

The interest on the loan as a percentage was 20%

The Simple interest (S.I) accumulated monthly on the principal amount (P)of $8000 is $400.

Using the simple interest formula which can be expressed as:

$\mathbf{S.I =\dfrac{PRT}{100}}$

where;

• R = interest rate
• T = time = 2 years = (12× 2) months

∴

$\mathbf{400=\dfrac{8000\times R\times (12 \times 2)}{100}}$

$\mathbf{40000=192000 R}$

$\mathbf{\dfrac{40000}{192000}=\dfrac{192000 R}{192000}}$

R = 0.20

As a percentage; we get:

R = 0.20 × 100%

R ≅ 20%  

Learn more about simple interest here:

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