Question

april took out a $600 loan from the bank. at the end of 5 years, she pays back the principal, plus $60 simple interest. what was the annual interest rate? %

Explanation:

Step1: Recall simple interest formula

The simple interest formula is $I = P \times r \times t$, where $I$ is interest, $P$ is principal, $r$ is annual rate, $t$ is time in years.

Step2: Rearrange to solve for $r$

$r = \frac{I}{P \times t}$

Step3: Substitute given values

$I = 60$, $P = 600$, $t = 5$.
$r = \frac{60}{600 \times 5} = \frac{60}{3000}$

Step4: Calculate and convert to percentage

$r = 0.02 = 2\%$

Answer:

2%