Elaine loans her brother $150 and he pays her back $160 thirty days later. Find the simple interest rate.

Question

 Elaine loans her brother $150 and he pays her back $160 thirty days later. Find the simple interest rate. 

Answer 1

i=p*r*t

$160-150=$10 interest

10=150*r*(30/365)

10=r*(4500/365)

multiply both sides by (365/4500)

(10)(365/4500)=r

simplify

365/450=r

73/90=r

r=0.811111...

r=81.111...% simple interest, or

r=81 1/9% simple interest

Answer 2

Use the formula I = Prt, where I = the amount of interest, P = the principal, r = the interest rate, and t = time

 

We need to find the rate, so we can solve the above formula for r.

 

r = I/Pt

 

The interest I = 10, the principal P is 150, and the time is 30 days. If you plug these values into the equation, then you can compute the simple (daily) interest rate.