Question

Zach borrowed $4,000 from his grandfather to buy a used car so he could travel to and from work. After working for 3 years, he has saved $5,920 to pay back to his grandfather. At what interest rate did Zach borrow the money ?

a. 23 %
b. 16%
c. 32 %
d. 11%

Answer 1

What's the interest here?

Answer 2

im not sure , that is all the info the question gave me ...

Answer 3

He borrowed 4 thousand and has to pay back 5920, so the interest is 5920 - 4000 = 1920 dollars

Answer 4

alrigjht , whats next ?

Answer 5

Since

Amount to pay back = principle + interest

Answer 6

So because the interest is 1920, we know that I = 1920

Answer 7

and whats the principal ?

Answer 8

Plug this along with p = 4000 (the principle) and t = 3 (time in years) into


I = Prt

Answer 9

?

Answer 10

to get


1920 = 4000*r*3

Answer 11

now solve for r

Answer 12

How do i solve for r ? Sorry , im really bad at math :/

Answer 13

No worries, just keep practicing and you'll get it


1920 = 4000*r*3


1920 = 4000*3*r


1920 = 12000*r


1920/12000 = r


0.16 = r


r = 0.16


So the interest rate is 16%

Answer 14

Thanks again ! (:

Answer 15

sure thing