Lucy took out a $24,000 loan for 1 month and was charged simple interest. The total interest she paid on the loan was $118. As a percentage, what was the annual interest rate of Lucy's loan? Do not round any intermediate computations. If necessary, refer to the list of financial formulas. % X
Lucy took out a $24,000 loan for 1 month and was charged simple interest. The total interest she paid on the loan was $118. As a percentage, what was the annual interest rate of Lucy's loan? Do not round any intermediate computations. If necessary, refer to the list of financial formulas. % X
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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**Instructions:**
1. Calculate the interest rate by determining the monthly rate first, and then annualizing it.
2. Use simple interest formula: \(I = P \times r \times t\), where \(I\) is the interest, \(P\) is the principal amount, \(r\) is the rate, and \(t\) is the time period.
3. Convert the monthly rate to an annual percentage rate (APR).
4. Enter your answer in the provided input field and click the "Check" button to validate your response.
For any assistance, click the "Help" button. To start over, click the "Reset" button.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fae063e21-e069-49f8-ad73-1d555b7f1041%2Fcc6c0af1-230b-4649-ae71-3c36b69526d7%2F915rasm_processed.jpeg&w=3840&q=75)
Transcribed Image Text:**Question:**
Lucy took out a $24,000 loan for 1 month and was charged simple interest. The total interest she paid on the loan was $118.
As a percentage, what was the annual interest rate of Lucy's loan? Do not round any intermediate computations. If necessary, refer to the [list of financial formulas](link here).
**Input Field:**
- %
**Action Buttons:**
- Check (✓)
- Reset (⟳)
- Help (?)
**Instructions:**
1. Calculate the interest rate by determining the monthly rate first, and then annualizing it.
2. Use simple interest formula: \(I = P \times r \times t\), where \(I\) is the interest, \(P\) is the principal amount, \(r\) is the rate, and \(t\) is the time period.
3. Convert the monthly rate to an annual percentage rate (APR).
4. Enter your answer in the provided input field and click the "Check" button to validate your response.
For any assistance, click the "Help" button. To start over, click the "Reset" button.
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