You borrow $18,000 to buy a new car. you will pay $3,240 in simple interest at the end of 6 years. what is the annual interest rate on your purchase? use the formula: i = prt.

The answer is:  " 3 % " .

Explanation:

Given:  I = Prt ; Solve for "r" ;

Rearrange the equation; to isolate "r" on one side of the equation; then plug in our given values to solve for "r" ;

               I = P r t ;

Divide EACH SIDE of the equation by "P*t" (that is:  "(Pt)" ;
  to get:  "r" on one side of the equation ;


        I / Pt  = (Prt) / (Pt) ;

to get:   I / Pt = r ;

↔  r = I / Pt  ;  

   GIven:  Interest = I = 3240 ;
                Principal  = P = 18000 ;
                time (in "years") = t = 6 ;

Plug in our given values to solve for " r " ("rate") ;

        r = I / (P t)  ;

  →  r =  3240 / (18000 * 6) ;

  →  r =  3240 / (108000) ;

  →  r = 3/100 = 0.03  =  3%

     The answer is:  " 3% " .

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