SOLUTION: Michael lend Farhan for $4800 for 7 months. at the end of this period Farhan has to pay Michael an interest of $119. what was the simple interest rate per annum

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Question 1129957: Michael lend Farhan for $4800 for 7 months. at the end of this period Farhan has to pay Michael an interest of $119. what was the simple interest rate per annum
Answer by Theo(13342) About Me  (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.

in your problem:

p = 4800
n = 7 months
i = 119.

the formula becomes 119 = 4800 * r * 7

solve for r to get r = 119 / (7 * 4800)

you get r = .0035416667.

that's the interest rate per month.

multiply by 12 to get r = .0425.

that's the interest rate per year.

multiply that by 100 to get annual percent rate (apr) = 4.25%.