Morgan Nunez
06/14/2023 · High School

Vince took out a \( \$ 500 \) loan to buy a new couch. He paid back the loan in 2 years and paid a total of \( \$ 570 \). What was the simple interest rate for his loan?

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Let's denote the simple interest rate as \( r \) and the principal amount as \( P \). The formula for calculating the total amount paid back for a simple interest loan is given by: \[ A = P + P \times r \times t \] where: - \( A \) is the total amount paid back, - \( P \) is the principal amount, - \( r \) is the interest rate, - \( t \) is the time in years. Given: - \( P = \$500 \), - \( A = \$570 \), - \( t = 2 \) years. We can substitute these values into the formula and solve for the interest rate \( r \). Solve the equation by following steps: - step0: Solve for \(r\): \(570=500+500r\times 2\) - step1: Multiply the terms: \(570=500+1000r\) - step2: Swap the sides: \(500+1000r=570\) - step3: Move the constant to the right side: \(1000r=570-500\) - step4: Subtract the numbers: \(1000r=70\) - step5: Divide both sides: \(\frac{1000r}{1000}=\frac{70}{1000}\) - step6: Divide the numbers: \(r=\frac{7}{100}\) The simple interest rate for Vince's loan is \( r = 0.07 \) or \( 7\% \).

Quick Answer

The simple interest rate for Vince's loan is 7%.
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