SOLUTION: A business owner borrows $5,600 for 5 months. At the end of the 5-month loan period, the interest owed is $115. What was the simple yearly interest rate (as a percent)?

SOLUTION: A business owner borrows $5,600 for 5 months. At the end of the 5-month loan period, the interest owed is $115. What was the simple yearly interest rate (as a percent)?

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Question 983341: A business owner borrows $5,600 for 5 months. At the end of the 5-month loan period,
the interest owed is $115. What was the simple yearly interest rate
(as a percent)?
Answer by Boreal(15235) (Show Source): You can put this solution on YOUR website!
I=PRT
R=I/PT
R=[115/(5600*5/12)]
R=115/(28000/12)=4.93%
Check with 5%, which should be close and a little higher
5600*(0.05)(5/12)=280*5/12=1400/12=116.67 which is consistent.
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