## Posts Tagged ‘Simple Interest Rate’

## Simple Interest Rate Find

** Simple Interest Rate Find**

**Example:-**

Carter Fenton wants to borrow 8000 from Christine O’Brien. He is willing to pay back 8380 in 6 months. What interest rate will he pay?

**Solution:-**

Use the formula for future value, with A = 8380, P = 8000, t = = .5, and solve for r.

A = P(1 + rt)

8380 = 8000(1 + .5r)

8380 = 8000 + 4000r (Distributive property)

380 = 4000r (Subtract 8000)

r = .095

Thus, the interest rate is 9.5%