Home > Math > Detail
search_icon
Question

You borrow 20,000 and must pay back 40,000 in 4 equial payments over 10 years. What is the interest rate?

Answer

The interest rate is 40%. Step-by-step explanation: To calculate the interest rate, we use the formula I = PRT. First, we need to rearrange the formula to find the rate. We can do this by dividing both sides by PT: R= I/PT * 100% Substituting the given values of I = $40,000, P = $20,000, and T = 10, we get: R = 40,000/20,000*10 * 100% R = 40% Therefore, the interest rate is 40%.