SOLUTION: you borrow $1400 from a friend and promise to pay back $2000 in two years. What simple interest rate, to the nearest tenth of a percent, will you pay?

Question 1039400: you borrow $1400 from a friend and promise to pay back $2000 in two years. What simple interest rate, to the nearest tenth of a percent, will you pay?
Found 2 solutions by Theo, MathTherapy:
Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
simple interest formula is i = p * r * n
i is the interest.
p is the principal
r is the interest rate per time period
n is the number of time periods.

the time period is in years.
the interest rate will therefore be per year.

i is equal to the amount you payed minus the amount that you owed.
that becomes 2000 - 1400 = 600

i = 600
n = 2 years
p = 1400, which is the amount that you borrowed.

the formula becomes 600 = 1400 * r * 2
simplify to get 600 = 2800 * r
divide both sides of the equation by 2800 to get:
600 / 2800 = r
solve for r to get r = 600/2800 = 6/28 = 3/14 = .21485714.
multiply that by 100 to get 21.485714%.
round to 1 decimal place to get 21.5%.

you are paying simple interest rate of 21.5% per year.
.215 * 1400 = 301.
multiply that by 2 to get 602.
without rounding, it would have been 600.

Answer by MathTherapy(10552) (Show Source): You can put this solution on YOUR website!

you borrow $1400 from a friend and promise to pay back $2000 in two years. What simple interest rate, to the nearest tenth of a percent, will you pay?

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