If a person borrows $2500.00 and, after 9 months, pays off the loan in the amount of $2603.13, what per annum rate of interest was charged?

The annual interest rate was of 5.5%.

Step-by-step explanation:

This is a simple interest problem.

The simple interest formula is given by:

In which E are the earnings, P is the principal(the initial amount of money), I is the interest rate(yearly, as a decimal) and t is the time, in years.

After t years, the total amount of money is:

.

In this problem:

Borrows 2500, so

Pays off the loan at $2603.13, so

This means that

.

We also have

9 months. An year has 12 months, so

We have to find I.

The annual interest rate was of 5.5%.

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