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24 July, 09:23

find the interest rate of a loan charging $640 simple interest on a principle of $5000 after 4 years.

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  1. 24 July, 11:19
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    Interest Rate = 3.2%

    Step-by-step explanation:

    To find the interest rate of a loan charging $640 simple interest on a principle of $5000 after 4 years, we will follow the steps below;

    Write down the formula for finding simple interest

    S. I = PRT/100

    where

    S. I = simple interest

    P = principal

    R=rate

    T=time (in years)

    From the question given

    S. 1=$640

    P=$5000

    T=4

    R=?

    We can now proceed to insert our values into the formula and then solve for R

    S. I = PRT/100

    $640 = $5000*R*4 / 100

    $640 = $20000R / 100

    Multiply 100 to both-side of the equation

    $640 * 100 = $20000R/100 * 100

    $64000 = $20000R

    Divide both-side of the equation by $20000

    $64000/$20000 = $20000R/$20000

    At the right-hand side of the equation $20000 will cancel-out each other leaving us with just R

    3.2 = R

    Rate = 3.2%
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