Jake received a student loan for $12,000 he plans on paying off a loan in five years.At the end of five years,Jake will have paid 3,600 in interest.What is the simple interest rate on the student loan?

1 Answer
Jan 25, 2018

Answer:

Rate of interest #color(green)(r = 6%)#

Explanation:

I = Interest, p = Principal, n = Period in years, r = Rate of Interest %

Given #I = $3,600, p = $12,000, n = 5 years#

#I =( p * n * r) / 100# for simple interest.

#r = (100 * I) / (p * n) = (cancel(100 * 3600) 30) / (cancel(12000) * 5) %#

#color(green)(r = (cancel(30) 6) / (cancel(5)) = 6%)#