Question

1.Zach borrowed four thousand dollars from his grandfather to buy a used car so he could travel to and from work. After working for 2 years, he has saved five thousand two hundred dollars to pay back to his grandfather. At what interest rate did Zach borrow the money? Round to the nearest whole percent.

twelve percent

fifteen percent

eighteen percent

thirty-eight percent

Answer 1

Do you use this formula I=prt

Answer 2

The simple interest formula yes...rearrange and solve for 'r'

Answer 3

How?

Answer 4

Well...we know that the original simple interest formula is

I = prt

where

I = interest earned
P = principal (original amount)
R = rate of interest
and
T = time (in years)

Since we already have I, P, and T...we want R

so instead of writing this as

1200 = 4000*R*2

we could rearrange the original equation...by dividing both sides by PT

I = PRT
-------
PT PT

this will leave us with

\[R = \frac{ I }{ PT }\]

So fill in your values and what do you get...?

Answer 5

And just to make sure everything is clear

I (interest earned) is what you get when you do (current balance - original balance)

Answer 6

so wait you divide two times?

Answer 7

Not quite....you know what...forget what I said about isolating the variable for the moment...lets do it the other way

You have the equation

I = PRT

right?

and you have what I, P, and T are right? so just put in those values

1200 = 4000*R*2

what does R equal...?

Answer 8

how did you get 1200

Answer 9

Remember when I said that

I (which is interest earned) is found by taking the current balance (5200) and subtracting the original balance (4000)

Answer 10

ok

Answer 11

So now that you have the I, P, and T....you can solve for R (rate)

Answer 12

B

Answer 13

right?

Answer 14

B) Fifteen Percent would be correct! Good job!

Answer 15

Thank you

Answer 16

No problem!