Question

What percentage interest rate is a loan that charges five hundred dollars in simple annual interest over 5 years on a one thousand dollar balance?

zero point one percent

zero point four percent

ten percent

forty percent

Answer 1

so SI = 500, P = 1000, T = 5 yr

R = 100 X SI / P X T

=> 500 X 100 / 1000 X 5

=> 50000/5000 = 10 percent. - option C