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Q.7

Expert-verified
Found in: Page 425

Principles of Economics

Book edition 2nd
Author(s) David Shapiro and Steven Greenlaw
Pages 892 pages
ISBN 9781947172364

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 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%