Scott took out a 4-year car loan for $5,500. He paid back a total of $7,370. What interest rate did he pay for this loan?

A) 9.5%

B) 9%

C) 8.5%

D) 7.5%

Amount of car loan taken by Scott = $5500

Amount of loan paid back by Scott = $7370

Then

Amount of money paid as interest by Scott = (7370 - 5500) dollars

= 1870 dollars

Then

Percentage of interest given for the car loan = (1870/5500) * 100

= 1870/55

= 34 percent

So Scott had to pay a total interest rate of 34% in the four years. I hope the procedure is simple enough for you to understand and solve future problems.