Question 1085524
<font color="black" face="times" size="3">I'm going to assume this is a simple interest loan (and not a compound interest loan)

The original amount is $1,000
The amount paid back is $1,600
The difference is 600 dollars (1600-1000 = 600)
This difference of $600 is the total amount of interest paid.
So i = 600 where i = interest


We'll use the formula
i = P*r*t
where,
i = 600, the interest found above
P = 1000, amount loaned out (Principal)
r = unknown
t = 3 years


So we get...
i = P*r*t
600 = 1000*r*3
600 = 1000*3*r
600 = 3000*r
600/3000 = 3000*r/3000
0.2 = r
r = 0.2


Since r = 0.2, this means that the <font color=red>interest rate is 20%</font> because 0.2 = 20/100 = 20%</font>