Using the ordinary interest method, what is the rate of interest on this loan?

Question

the total amount of interest on a loan of $6,000 for 150 days is $210.50. Round the answer to the nearest hundredth.
a)2.34%
b)8.42%
c)8.53%
d)11.88%

Answer 1

Interest = Principal * Rate * Time

Principal = 6000
Rate = x (per year)
Time = 150 days = 5/12 year (taking 30 days as a month)

210.50 = 6000*x*(5/12)

Solve for x.

(As written above, x will be a fraction. You will need to convert it to a percentage.)