Problema Solution
Roger borrows $3417 from Francine for 43 months. If Francine wants Roger to repay 54% more than what he borrowed, what annual simple discount rate should she charge him?
Answer provided by our tutors
P = $3417 the principal
t = 43 months = 43/12 years the time
A = 1.54P future value (54% more than P)
r = simple annual rate
A = P*r*t
P*r*t = A
P*r*(43/12) = 1.54*P divide both sides by P*(43/12)
r = 1.54/(43/12)
r = 0.4298 or 42.98%
Francine should charge simple annual rate of 42.98%.