A loan of $1,090 was repaid at the end of 12 months with a check for $1,105. What annual rate of interest was charged?

Question

Leilani

Mathematics

3 January, 07:01

A loan of $1,090 was repaid at the end of 12 months with a check for $1,105. What annual rate of interest was charged?

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Answers (1)

Know the Answer?

Esther Drake · Answer 1

Answer: 1.38%

Step-by-step explanation:

A loan of $1,090 was repaid at the end of 12 months with a check for $1,105. From the question, the principal is $1090, time is 12 months. Interest is (1105 - 1090) = $15. To calculate the rate goes this:

Formuale is below:

Rate = (Final/initial) - 1

= (1105/1090) - 1

= 1.0138 - 1

= 0.0138

= 1.38%

The annual rate of interest is 1.38%