Question 1:

If t = 3.52895, then the time is about 3 years and how many days?

__30 or __300 or __ 52 or __150?


Question 2:

If a business borrows $24,000 and repays $39,300 in 5 years, what is the simple interest rate? I had $21.43% but it was incorrect. Could you show me how your get your answer please.

For (1): 3.52895 years is a bit more than half way between 3 years and 4 years - do you see why that is? Which of the four choices of answers is closest to half a year? (BTW - none of the answers is a terribly good estimate of 0.52 years, but one is closer than the others).

For (2): the simple interest rate is determined by dividing the amount of interest paid each year by the amount borrowed. The payments over the 5 years include both repayment of the original borrowed amount plus interest. Hence total interest paid over 5 years is $39,300 - $24,000 = $15,300. That's the amount paid over 5 years, so each year the business pays interest of $15,300/5 = $3,060/year. Divide this into the amount borrowed, and what do you get for an answer?

1) when I answered 150 it was correct.

2) when I divide $3,060 into $39,300 I get 12.84

Quote:

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Originally Posted by Algebra8

2) when I divide $3,060 into $39,300 I get 12.84

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The interest rate is based on the original amount borrowed - which is $24,000, not $39,300.