luck borrows $12,000 from the bank and pays $5,040 interrest in 7 years. What simple interest rate is luck paying on his loan?

Question

What is going to be the simple interest rate of luck.

Answer 1

Simple interest formula is:

A = P(1+ rt)

A = 12000+ 5040 = 17040

P = 12000

t = 7

17040 = 12000(1+7r)

Solve for r

 

17040/ 12000 = 1 +7r

 

1.42 -1 = 7r

.42 = 7r

.42/7 = r 

.06 = r