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1 April, 02:16

Mr. Velez borrowed $16,800 for 54 months at simple interest to pay for a new swimming pool. If Mr. Velez paid the bank a total of $26,854.80, what was the simple interest rate of the loan?

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  1. 1 April, 04:33
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    Answer:the simple interest rate of the loan is 13.3%

    Step-by-step explanation:

    The formula for determining simple interest is expressed as

    I = PRT/100

    Where

    I represents interest paid on the loan.

    P represents the principal or amount taken as loan

    R represents interest rate

    T represents the duration of the loan in years.

    From the information given,

    P = $16,800

    R = ?

    T = 54 months = 54/12 = 4.5 years

    I = 26854.80 - 16800 = $10054.8

    Therefore

    10054.8 = (16800 * R * 4.5) / 100

    10054.8 = 756R

    R = 10054/756

    R = 13.3%
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