Finite Math and Applied Calculus (6th Edition)

Published by Brooks Cole
ISBN 10: 1133607705
ISBN 13: 978-1-13360-770-0

Chapter 2 - Section 2.1 - Simple Interest - Exercises - Page 133: 27

Answer

$ r=10\%$

Work Step by Step

The interest on the loan (without the fee) is $INT=PV(rt)=5000\times 0.09\times 2=\$ 900$ With the additional fee of $\$ 100,$ it becomes $\$ 1000.$ With this new interest, we find r from $INT_{new}=PV(rt)$ $1000=5000(r\cdot 2)$ $1000=10,000r\quad/\div 10,000$ $r=0.1$ $ r=10\%$
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