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Chapter 17: Q 7. (page 425)

If you receive \(500 in simple interest on a loan that you made for \)10,000 for five years, what was the interest rate you charged?

Short Answer

Expert verified

25%

Step by step solution

01

Step 1. Definition

The value of simple interest on a loan can be obtained by multiplying the interest rate by the principal and by the number of days.

02

Step 2. Explanation

$500=$10000×5×R10025%=R

So the interest charged is 25%.

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Most popular questions from this chapter

Imagine that a local water company issued \(10,000

ten-year bond at an interest rate of 6%. You are thinking about buying this bond one year before the end of the ten years, but interest rates are now 9%.

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