the principal p is brrowed and the loans future value a at time t is given. determine the loans simple interest rate r to the nearest tenth of percent. p=6000,a=6420,t=1year

Question

the principal p is brrowed and the loans future value a at time t is given. determine the loans simple interest rate r to the nearest tenth of percent. p=6000,a=6420,t=1year

Answer 1

The formula for simple interest is I=Prt

The interest is 6420-6000=420

P=6000

t=1 year

r = unknown

If we plug these values into the equation:

420=6000r(1)

divide both sides by 6000

420/6000=6000r/6000

0.07=r

or as a percentage, the interest rate is 7%