Question

1

Jeffrey pawns his watch for a $75 loan and 2 months later gets it back by pa annual simple interest rate did the pawnbroker charge? Teets it back by paying the pawnbroker $80. What

Answer 1

Interest = Amount at the end - Initial Amount

             = 80 - 75

             = 5

Formula for Simple Interest:

                 (1)

I= PNR 100

Here

I = Interest = 5

P = Principal Amount = 75

N = Number of years = 2/12 = 1/6

R = Rate of Interest (To be found)

Substituting, we get:

5 =- 75 x (1/6) R 100

So,

we get:

75 X R = 5 X 100 X 6

So,

5 x 100 x 6 R = 1 -=40

So,

Answer is:

40 %