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Andrew borrows $79,500 for 2 years and earns $10,017 of simple interest. Calculate the interest rate?

Question

Andrew borrows 79,500for2yearsandearns79,500 for 2 years and earns 10,017 of simple interest. Calculate the interest rate?

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Solution

To calculate the interest rate, we can use the formula for simple interest which is I = PRT, where I is the interest, P is the principal amount (the initial amount of money), R is the rate of interest, and T is the time in years.

In this case, we know: I = 10,017P=10,017 P = 79,500 T = 2 years

We want to find R. So, we rearrange the formula to solve for R:

R = I / (P * T)

Substituting the given values:

R = 10,017/(10,017 / (79,500 * 2)

R = 10,017/10,017 / 159,000

R = 0.063

To express the interest rate as a percentage, we multiply by 100:

R = 0.063 * 100 = 6.3%

So, the interest rate is 6.3%.

This problem has been solved

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