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Math Help - Simple Interest

  1. #1
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    Oct 2008
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    Simple Interest

    The problem is

    If you paid $30 to a loan company for the use of $1000 for 60 days, what annual rate of interest did they charge you?

    I started out the problem 30(1+60/360)/1000 but all i got was .035 I know this isnt the right anwser.
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  2. #2
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    Aug 2008
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    Reply

    interest = $30
    Principal P = $1000
    Let interest rate = r % annually.

    time, t = 60 days = \frac{60}{365} year.

    Interest = Prt

    <br />
30 = 1000\times r \times \frac{60}{365}

    r = 0.1825

    r = 18.25% annually
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