My cousin borrowed $15,000 for a new car loan for 5 years. he told me that at the end of the loan, he had paid $21,000 for the interest and principal. what was the rate of the loan? a. 7% b. 8% c. 9% d. 10%

To solve this problem we are going to use the simple interest formula: 
where
is the sum of the interest and the principal
is the principal
is the interest rate in decimal form 
is the time in years

We know for our problem that , , and . Now, let  represents our interest rate. To express the interest rate in decimal form, we are going to divide the rate by 100%:

.
Now that we have all the values we need, lets replace them in our simple interest formula to find the interest rate:








We can conclude that the interest rate of your cousin's loan was 8%.

Hope i can you!

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