The interest on the loan as a percentage was 20%
The Simple interest (S.I) accumulated monthly on the principal amount (P)of $8000 is $400.
Using the simple interest formula which can be expressed as:
[tex]\mathbf{S.I =\dfrac{PRT}{100}}[/tex]
where;
- R = interest rate
- T = time = 2 years = (12× 2) months
∴
[tex]\mathbf{400=\dfrac{8000\times R\times (12 \times 2)}{100}}[/tex]
[tex]\mathbf{40000=192000 R}[/tex]
[tex]\mathbf{\dfrac{40000}{192000}=\dfrac{192000 R}{192000}}[/tex]
R = 0.20
As a percentage; we get:
R = 0.20 × 100%
R ≅ 20%
Learn more about simple interest here:
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