The interest rate on loan is 5.25%.
What is principal amount?
The loan amount that the lender gives to the borrower is referred to as the primary amount. Additionally, it is the factor the lender uses to calculate interest.
What is simple interest?
Simple interest is a method to calculate the amount of interest charged on a sum at a given rate and for a given period of time. The formula to calculate simple interest is I=P.r.t
Given, Principal amount=$125,000, time=10years, Interest=$65,625.
Let r be the rate of interest, on applying simplest interest formula
I=P.r.t
Where P=principal amount, r=rate, t=time.
I=125,000 x r x10
65,625=125,000 x r x10
r=[tex]\frac{65,625}{125,000(10)}[/tex]
r=0.0525
r=5.25%
Learn more about simple interest.
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