SOLUTION: Your friend needs a loan of $4,000 for 2 months. You tell him for the simple interest loan service he needs to pay you back $4,030.00. What is the simple interest rate on your frie

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Question 728355: Your friend needs a loan of $4,000 for 2 months. You tell him for the simple interest loan service he needs to pay you back $4,030.00. What is the simple interest rate on your friendly loan?
Answer by jim_thompson5910(35256) About Me  (Show Source):
You can put this solution on YOUR website!
The interest he needs to pay back is 30 dollars (the difference in the amount he borrows and has to pay back).

I = Prt

30 = 4000*r*(2/12)

30 = 666.667r

30/666.667 = r

r = 0.04499998

r = 0.045 (rounded to the nearest thousandth)

r = 4.5%