Question

suppose you borrowed $12,000 from a relative. last month, your relative charged you $20 interest. the solution to the equation $20 = \frac{12,000}{12} \cdot r$ (represents the annual interest rate on the loan). find the interest rate.

\bigcirc 2%
\bigcirc 20,000%
\bigcirc 20%
\bigcirc 0.2%

Explanation:

Step1: Simplify the fraction

$\frac{12000}{12} = 1000$

Step2: Substitute into the equation

$20 = 1000 \cdot r$

Step3: Solve for $r$

$r = \frac{20}{1000} = 0.02$

Step4: Convert to percentage

$0.02 \times 100\% = 2\%$

Answer:

2%