Elisa needs money to repair her home air conditioner, so she pawns her bicycle. The pawnbroker loans Elisa $270. Eleven days later, Elisa gets her bicycle back by paying the pawnbroker $279.90. What annual simple interest rate did the pawnbroker charge Elisa? Assume 360 days in a year. The pawnbroker charged Elisa a simple interest rate of

The pawnbroker charged Elisa a simple interest rate of 120% per year

Explanation:

I = PRT/100

I is the simple interest = amount - principal = $279.90 - $270 = $9.90

P (principal) is the loan given Elisa = $270

R is the annual simple interest rate

T (time) is the duration the loan is paid back with interest = 11 days = 11/360 year

9.9 = 270 * R * 11/360 * 1/100

R = (9.9*360*100) / (270*11) = 120%

Annual simple interest rate = 120%