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Q.7

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Principles of Economics

Found in: Page 425

Book edition 2nd

Author(s) David Shapiro and Steven Greenlaw

Pages 892 pages

ISBN 9781947172364

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Short Answer

If you receive $500 in simple interest on a loan that you made for $10,000 for five years, what was the interest rate you charged?

Interest rate is obtained as 1%

See the step by step solution

Step by Step Solution

TABLE OF CONTENTS :

TABLE OF CONTENTS

Step 1: Concept introduction

The Random Walk Theory: The random walk theory asserts that past fluctuations or patterns in stock market prices cannot be used to foretell or predict future stock market prices of movement. Alternatively, it might relate to the future unpredictability of stock market pricing.

Step 2: Calculation

The interest rate charged is 1 percent.

Simple Interest = Principal Rate Time

Interest amount = $ 500

Time period = 5 year

Principal amount = $10,000

Interest Rate = ?

Interest rate =

Interest rate =

Interest rate = 1%

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