SOLUTION: If a business borrows $25,000 and repays $36,500 in 4 years, what is the simple interest rate?

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Question 621370: If a business borrows $25,000 and repays $36,500 in 4 years, what is the simple interest rate?
Answer by fcabanski(1391) About Me  (Show Source):
You can put this solution on YOUR website!
Simple Interest, I = Prt where P is the principal, r is the interest rate and t is the time.


Using algebra find that I/Pt = r.


In this problem I = 36,500 - 25,000 = $11,500. P = 25000 and t = 4.


11500/(25000*4) = r = 11500/100000 = .115 = 11.5%

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