Question

Kaylee obtains a loan with simple interest to buy a car that costs $8,500. If Kaylee pays $1,020 in interest during the four-year term of the loan, what was the rate of simple interest?A.0.03%B.3%C.8.3%D.12%

Answer 1

Answer : r = 3%

$\begin{gathered} I\text{ = }\frac{P\text{ X R X T}}{100} \\ \text{Where I = interest, P = principal, R = rate, and T= time} \\ I\text{ = \ 1,020} \\ P\text{ = \ 8,500} \\ T\text{ = 4} \\ 1020\text{ = }\frac{8500\text{ x r x 4}}{100} \\ 1020\text{ x 100 = 8500 x 4 x r} \\ r\text{ = }\frac{8500\text{ x 4}}{1020\text{ x 100}} \\ r\text{ =}\frac{34000}{102000} \\ r\text{ = }0.333 \\ r\text{ = }3^{} \\ r\text{ = 3\%} \end{gathered}$