Answer:
21.5%
Step-by-step explanation:
The Formula for Simple Interest is given as
Simple Interest = (Principal × Rate × Time) ÷ 100
In the above question, Principal = Amount you intend to borrow = $2,000
Rate = Unknown
We are told that You promise to pay back = $4,150
Time = 5 years
The Simple Interest is calculated as Amount - Principal
= $4,150 - $2,000
Simple Interest = $2,150
The Formula for calculating rate is derived from Simple Interest formula as:
Simple Interest = (Principal × Rate × Time) / 100
Cross Multiply
Simple Interest × 100 = Principal × Rate × Time
Rate = Simple Interest × 100/ Principal × Time
Rate = $2,150 × 100/ $2,000 × 5
Rate = 21.5%
Therefore, the simple interest rate you will pay = 21.5%
