SOLUTION: Solve the following application and show your work. Business and finance. Ms. Jordan has been given a loan of $2500 for 1 year. If the interest charged is $275, what is the intere

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Question 71867: Solve the following application and show your work.
Business and finance. Ms. Jordan has been given a loan of $2500 for 1 year. If the interest charged is $275, what is the interest rate on the loan?
Answer by tutorcecilia(2152) About Me  (Show Source):
You can put this solution on YOUR website!
If the rate is "simple interest" use the following formula:
Interest = (Principle)(rate)(time)
I=Prt [plug-in the values; solve for the unknown variable (interest rate)
.
$275-($2500)(rate)(1 year)
.
275=(2500)(r)(1)
275=2500r
275/2500=2500r/2500
.11=r
.11X100%=r [Multiply by 100% becasue the rate is a percent]
11%=rate
.
Check by plugging all of the values back into the original equation and solve. Change the percent back into a decimal:
I=Prt
275=(2500)(.11)(1)
275=275 [Checks out]