Zach borrowed $4,000 from his grandfather to buy a used car so he could travel to and from work. After working for 2 years, he has saved $4,720 to pay back to his grandfather. At what interest rate did Zach borrow the money?

8%
9%
15%
42%

Question

Zach borrowed $4,000 from his grandfather to buy a used car so he could travel to and from work. After working for 2 years, he has saved  $4,720 to pay back to his grandfather. At what interest rate did Zach borrow the money?

8%
9%
15%
42%

ajprincess · Answer

Let the interest rate be x.
Additional payment for 2 yrs=4720-4000
                            =720
So for one year=720/2
                      =360
x=(Additional payment for one year/Total payment)*100
  =(360/4000)*100

anonymous · Answer

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