percent interest

Question

Lane French had a bad credit rating and went to a local cash center. He took out a $100.00 loan payable in two weeks at $111.50. What is the percent of interest paid on this loan

Answer 1

The interest is $11.50.  To get the percentage, divide interest / principle

 

11.50 / 100 = 0.0115 = 11.5 %

 

Note the ANNUAL rate of interest.  There is no compounding, so the annual rate is simply the weekly rate * 52

The weekly rate is 11.5 / 2, and the annual rate is then

(11.5 / 2 )* 52 = 11.5 * 26 = 299%

 

My guess is that the teacher just wants the simple interest