. What was the interest rate?

Question

Over a three-year period, the total interest paid on a $4,500 loan was $1,620. What was the interest rate?

Answer 1

Given 

Time (T) = 3yrs

Interest (I) = $1620

Principal (P) = $4500

Formula for the Interest is

I  =  (P X T X R ) / 100 --------------> (1)

Substitute T = 3, I = 1620 and P = 4500 in Eq (1)

1620  =  (4500 X 3 X R) / 100

1620  =  45 X 3 X R

R  =  1620 / ( 45 X 3 )

R  =  12 %.

Answer :

The Rate of Interest is 12 %