Mr. Johnson borrowed $8000 for 4 years to make home improvements. If he repaid a total of $10,320, at what interest rate did he borrow the money?

7.25%

Step-by-step explanation:

Simple interest can be found using the following formula:

I = prt, where I = the interest, p = principal amount, r = interest rate and t = time

In this problem, you are solving for 'r', so you can plug in the other values and use inverse operations to find the rate.

Since Mr. Johnson repaid $10,320 on an $8000 loan, his total interest paid was $10,320 - $8,000 = $2,320.

2320 = 8000 (4) r

2320 = 32000r

Divide by 32000 on both sides: 2320/32000 = 32000r/32000

r = 0.0725

multiply by 100 for percentage: 0.0725 x 100 = 7.25%