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Sagot :
Using simple interest, it is found that the interest rate for the 12-month loan is of 6.74%.
Simple Interest
Simple interest is used when there is a single compounding per time period.
The amount of money after t years in is modeled by:
A(t) = A(0)(1 + rt)
In which:
- A(0) is the initial amount.
- r is the interest rate, as a decimal.
In this problem, we have that the parameters are given by:
t = 1, A(0) = 1900, A(t) = 12 x 169 = 2028.
We have to solve for r to find the APR, hence:
A(t) = A(0)(1 + rt)
2028 = 1900(1 + r)
1 + r = 2028/1900
1 + r = 1.0674.
r = 0.0674.
Hence, the interest rate for the 12-month loan is of 6.74%.
More can be learned about simple interest at https://brainly.com/question/25296782
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