00:03
So let's say that you borrow $5 ,000 and it takes you nine months to completely pay off your loan.
00:09
However, after nine months, you realize that you have paid $5 ,500.
00:14
Now, you want to find the interest rate at which you were being charged.
00:19
So here we have p equals 5 ,000.
00:27
T is the amount of time or nine months.
00:31
And we need to solve for i because i is a number of time.
00:35
Difference between the amount you paid and the amount that you borrowed.
00:39
So i would be 5 ,500 minus $500 or simply $500.
00:45
So what we are looking for is we are looking to solve for r.
00:49
Let's recall the simple interest formula.
00:51
The simple interest formula is i equals p rt.
00:57
So we have both we have i which is 500.
01:02
We have p which is 5 ,000.
01:04
We have t, which is 5 ,000.
01:05
We have t, which we have t, which is nine months, so all we need to do is solve for r...