Question

Moira borrowed \(4,500 from her grandfather to pay for her first year of college. Three years later, she repaid the \)4,500 plus $243 interest. What was the rate of interest?

Short answer

The rate of interest was is 1.8%.

Step-by-step solution

Step 1. Given information

$$\begin{gathered} Principal=\$4500 \\ TimePeriod=3years \\ Interestearned=\$243 \end{gathered}$$

Step 2. Calculation

$$\begin{gathered} P=4500 \\ T=3 \\ S.I.=243 \\ Therefore, \\ SI=\frac{P\times R\times T}{100} \\ \frac{3\times r\times 4500}{100}=243 \\ =1.8\% \end{gathered}$$