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To buy new equipment, a business owner borrowed $4,200.00 for 2 years and paid $850.00 simple interest on the loan. What rate of interest did she pay?

Respuesta :

Answer:

Explanation:

simple interest formula: I = PRT

850=4200*2*(R)

850=8400*R

850/8400=R

Rate = .1011904761904762

Moonaar

Answer: Approximately 10.12%

Explanation: The formula for simple interest is = P*R*T/100. Where P is principal which is 4200 in the question, R is the interest rate that is unknown, T is time which is 2 years.

Substituting the figures in the question and making R the subject of formula,

850 = 4200 * R* 2/100

850 = 8400R/100

Applying the cross multiplication rule 850*100 = 8400R

85000 = 8400R

Divide both sides by 8400 to get the value of R

85000/8400 = 8400R/8400

R = 10.1190%

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