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Lebron lent his daughter \(20,000 to help her buy a condominium. When she sold the

condominium four years later, she paid him the \)20,000, plus $3,000 interest. What was the rate of simple interest?

Short Answer

Expert verified

Simple interest rate is 3.75%.

Step by step solution

01

Given information.

Pricipal,P=$20,000Time,t=4yearsInterest,I=$3000Rate,r=?

02

Calculate the interest rate.

Use the following formula and solve for unknown value.

I=Prt3000=20000×r×43=80rr=0.0375r=3.75%

so, simple interest rate is 3.75%.

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