Vincent took out a 500 loan to buy a new couch. He paid back the loan in 2 years and paid an interest of 70. What was the simple interest rate for his loan?

Solution

Solution

Rate : 7%

Solution steps

Translate the problem into an equation:

70 = 500 r \cdot 2

Solve for

r, 70 = 500 r \cdot 2 : r = 7%

Rate : 7%

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