Question

Luke borrowed 15000 to pay his college tuition after he graduates he will repay the loan along with simple interest after 2 years luke will owe a total of 17250 what is the simplest interest rate on lukes loan

Answer 1

Answer: 7.5%

Step-by-step explanation:

Given: Principal amount = $15,000

Time =- 2 years

Final Amount (Principal + interest)= $17,250

Interest = Final Amount - Principal amount

= $ ( 17250 - 15000  )

= $ 2250

Formula for interest : principal x rate x time

$2250=15000\times rate \times 2\\\\\Rightarrow\ rate =\dfrac{2250}{15000\times2}\\\\\Rightarrow\ rate =0.075\\\\\Rightarrow\ rate =0.075\times100\%=7.5\%$

Hence, the simplest interest rate on lukes loan =7.5%