SOLUTION: Mr. Brown borrows $1600 for one year from a loan company. He is given only $1560 and is expected to repay the $1600 at the end of one year. What is the simple discount rate? Give

Question 78536: Mr. Brown borrows $1600 for one year from a loan company. He is given only $1560 and is expected to repay the $1600 at the end of one year. What is the simple discount rate? Give the simple discount rate as a percent.
Answer by tutor_paul(519) (Show Source): You can put this solution on YOUR website!
The discount rate can be thought of as the cost of borrowing money, or interest deducted in advance for money that is borrowed. To calculate the discount rate, use the following equation:
=0.025
To express the dscount rate as a percent, multiply it by 100%
=2.5%
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