Given:
Mr. Sun borrowed $15,600 for 54 months at simple interest.
Mr. Sun paid the bank a total of $21,567.00.
To find:
The rate of simple interest.
Solution:
We know that,
12 months = 1 year
1 month = [tex]\dfrac{1}{12}[/tex] year
54 months = [tex]\dfrac{54}{12}[/tex] year
54 months = 4.5 years
Simple interest is:
[tex]S.I.=Amount-Principal[/tex]
[tex]S.I.=21567-15600[/tex]
[tex]S.I.=5967[/tex]
Formula for simple interest is:
[tex]S.I.=\dfrac{P\times r\times t}{100}[/tex]
Where, P is principal, r is the rate of interest in percent and t is the number of years.
Putting [tex]S.I=5967,P=15600,t=4.5[/tex], we get
[tex]5967=\dfrac{15600\times r\times 4.5}{100}[/tex]
[tex]596700=70200r[/tex]
[tex]\dfrac{596700}{70200}=r[/tex]
[tex]8.5=r[/tex]
Therefore, the rate of simple interest is 8.5%.
