SOLUTION: To start a mobile dog-grooming service, a woman borrowed $1,500. If the loan was for 2 years and the amount of interest was $75, what simple interest rate was she charged?

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Question 1099097: To start a mobile dog-grooming service, a woman borrowed $1,500. If the loan was for 2 years and the amount of interest was $75, what simple interest rate was she charged?
Answer by Theo(13342) About Me  (Show Source):
You can put this solution on YOUR website!
$75 interest divided by 2 years is $37.5 interest charged per year.

37.5 / 1500 = .025.

she was charged 2.5% interest per year.

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.

in her case, this formula becomes 75 = 1500 * r * 2.

solve for r to get r = 75 / 1500 / 2 = .025 = 2.5%.