If Mega Corp.borrows $9 000 and agrees to pay the lender $10 500 in 1 year,the annual interest rate on this loan is approximately _____%.

Question

Quizplus · Accepted Answer

To calculate the annual interest rate, we need to use the formula:

interest rate = (interest / principal) x 100

Where:

interest = the amount of money paid in interest
principal = the amount borrowed

In this case, Mega Corp. borrowed $9,000 and agreed to pay back $10,500, which means the interest paid is:

interest = $10,500 - $9,000 = $1,500

Plugging this back into the formula, we get:

interest rate = (1500 / 9000) x 100 = 16.7%

Therefore, the answer is C) 16.7%.