Question

Don Glover borrowed $16,000 for 230 days and paid $587.79 in simple interest on the loan. What annual simple interest rate did Don pay on the loan?

Answer 1

Answer:

Try this equation

Step-by-step explanation:

If we wish the rate, we can find it by

r = I / Pt

Here we have

r = 587.79/ (16000)(250/365) =

Answer 2

The annual simple interest rate is 5.8%

How to determine the rate?

The given parameters are:

• Principal, P = $16,000
• Interest, I = $587.79
• Time = 230 days

Convert days to years

Time = 230/365 years

The annual simple interest rate is calculated using:

I = PRT

This gives

587.79 = 16000 * R * 230/365

Solve for R

R = 0.058

Express as percentage

R = 5.8%

Hence, the annual simple interest rate is 5.8%

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