Nestor borrows $10,000 from the shady loan shark, Mr. Wildcat. Mr. Wildcat tells him he must repay the loan in 1 month and pay an additional $1000 in interest. If Mr. Wildcat is charging simple interest on his loan, what is the annual interest rate?

I'm so lost. I have no idea how to do this. Help me!!!

Question

Nestor borrows $10,000 from the shady loan shark, Mr. Wildcat. Mr. Wildcat tells him he must repay the loan in 1 month and pay an additional $1000 in interest. If Mr. Wildcat is charging simple interest on his loan, what is the annual interest rate?

I'm so lost. I have no idea how to do this. Help me!!!

anonymous · Answer

maybe this will help you clarify (: http://answers.yahoo.com/question/index?qid=20111204103040AAaPcXv

anonymous · Answer

Thanks for that, but I looked at that and got even more confused :( lol

tkhunny · Answer

Simple Interest
I = Prt -- Every time!

I = 1000
P = 10000
t = 1/12 <== This is one month in years.

Substitute and solve for r.