Jane takes out a simple interest loan for $2500 for one year. If she repaid $2,582.25 at the end of the year, what was the interest rate on the loan?

Answer 1

I=p•r•t

I: interest 2582.25

p: principal 2500 (money invested or borrowed)

r: rate (% as a decimal)

t: time 1 (years)

I= 2582 p= 2500 r=? t=1

you know I,p, and t so you’ll need to solve for r.

2582= (2500)r(1)

2582=2500r

Solve for r, then make it a % by moving the decimal two places. I hope this helps you get started.

Answer 2

A = p(1 + rt)

2582/25 = 2500(1 + r)