The rate of interest is 12.2 %
Solution:
Given that, Mr mojo borrowed $9000 for 10 years to make home improvements
He repaid a total of $ 20000
To find: Rate of interest
We can use simple interest formula to calculate the rate of interest
Total amount = Principal + simple interest
20000 = 9000 + simple interest
Simple interest = 20000 - 9000
Simple interest = 11000
The simple interest is given as:
[tex]I = \frac{ p \times r \times t}{100}[/tex]
Where,
"I" is the simple interest
"p" is the principal
"r" is the rate of interest
"t" is the number of years
Substituting the values,
[tex]11000 = \frac{9000 \times r \times 10}{100}\\\\11000 = 900 \times r\\\\r = \frac{11000}{900} = 12.2[/tex]
Thus rate of interest is 12.2 %
