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27 August, 12:42

If you paid $120 to a loan company for the use of $2000 for 90 days, what annual rate of interest did they charge?

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  1. 27 August, 13:02
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    I = $120

    P = $2000

    T = 90days = 3 months = 1/4 yr

    R = ?

    I = PTR/100

    ⇒ 120 = 2000 * 1/4 * R/100

    ⇒ R = (120*100*4) / 2000

    ⇒ R = 24%

    They charged 24% interest rate annually
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