Question

Sebastian's parents agree to lend him $200 for some gaming equipment, as long as he pays them back $250 in a year's time. What is the rate of simple annual interest in this arrangement?

Answer 1

he has to pay 25% interest every year, so 125% of the money has to be payed back by a year, 150% in 2 years and 175% in 3 years

Answer 2

$50(years)+$200

Answer 3

\[\frac{50}{200}=\frac{1}{4}=.25=25\%\]