Problem

To borrow money, you pawn your guitar. Based on the value of the guitar, the pawnbroker loans you $\$ 600$. One month later, you get the guitar back by paying the pawnbroker $\$ 1472$. What annual interest rate did you pay?

Solution

Step 1 :Calculate the interest paid by subtracting the loan amount from the amount paid back: \(1472 - 600 = 872\)

Step 2 :Calculate the monthly interest rate by dividing the interest paid by the loan amount: \(\frac{872}{600} = 1.4533333333333334\)

Step 3 :Calculate the annual interest rate by multiplying the monthly interest rate by 12: \(1.4533333333333334 \times 12 = 17.44\)

Step 4 :Final Answer: The annual interest rate paid is \(\boxed{17.44}\)

From Solvely APP
Source: https://solvelyapp.com/problems/18047/

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