Simple Interest Rate

Question

I know the formula and I understand how to do it but I just cant get this question right. The question "You have agreed to borrow $50 dollars and  after six months pay back $58. How much interest are you paying? What is the interest rate? I know the formula is I=PRT. We need to find r or the interest rate. I know t is time or 6 months but we need to convert it to half a year or 0.5. I'm now confused on whats the I and Principle. Please help. I'm really confused.

Answer 1

i=prt

$58-$50=$8.00 interest is what you paid

8=50*R*0.5  ($50 is the principal)

8=R*50*0.5

8=R*25

R=8/25

R=(8*4)/(25*4)  (or divide 25 into 8 to get 0.32=32%)

R=32/100

R=32% per year is the interest rate