SOLUTION: You borrowed $27000 for 5 years. You promised to pay back the principal and the interest in one lump sum. After 5 years you paid the lump sum of $54000. What was the annual rate

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Question 13334: You borrowed $27000 for 5 years. You promised to pay back the principal and the interest in one lump sum. After 5 years you paid the lump sum of $54000. What was the annual rate in percent? Here the interest is assumed to be calculated by the rule of simple interest, that is, if you borrow $A for n years with the interest rate r, your total interest will be $nrA, the product of n, r and A.
Answer by akmb1215(68) About Me  (Show Source):
You can put this solution on YOUR website!
Since you know that the equation is nrA, you need to just plug in for those and solve. n is the number of years, which in this case is 5, so n=5. r is the percentage rate, which is what you don't know, so you leave this as r. A is the amount you borrowed, which is 27,000, so A=27,000. This together multiplies to equal the interest, which you can figure out by doing 54000-27000, which is 27,000.
Once you get all that, you can set up the equation 27000=5%28r%29%2827000%29. To solve, you can start dividing. First move the 27000 from the right side to the left side by dividing it out. You get 1+=+5%28r%29. Then, divide by 5 to get .2=r. r=.2, but this is in a decimal. Your answer wants it as a percent, so simply change a decimal to a percent, which you do by moving the decimal two places to the right. The interest is 20%.