If Jack borrowed $200 and repaid $226 at the end of two years, what was the interest rate?

Question

Mathematics

Asia Collier

25 November, 11:15

If Jack borrowed $200 and repaid $226 at the end of two years, what was the interest rate?

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Answers (2)

Know the Answer?

Randall · Answer 1

The interest rate is 6.5% per year.

Branden Arias · Answer 2

If Jack borrowed $200 and ended up paying $226 at the end, his interest rate is about $1.08.

To get this answer, we would have to divide. His interest was probably paid monthly, therefore we'll be dividing by 24 (two years).

Furthermore ...

26 : 24 = 1.08 per month.