If $22,050 is the amount payable in two years for a $20,000 simple loan made today,the interest rate is
A)5 percent.
B)10 percent.
C)22 percent.
D)25 percent.

Name: If $22,050 is the amount payable in two years for a $20,000 simple loan made today,the interest rate is A)5 percent. B)10 percent. C)22 percent. D)25 percent.
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Question

Quizplus · Accepted Answer

The interest amount is $22,050 - $20,000 = $2,050. Since this is a simple interest loan, the annual interest rate is ($2,050 / $20,000) / 2 = 0.05 or 5%.

If $22,050 Is the Amount Payable in Two Years for a $20,000