Answer:
The annual rate of return is 13.14%.
Step-by-step explanation:
As it is not mentioned whether the amount was compounded, so we will assume this to be simple interest.
Given is - A $3500 loan was settled ten years later with a payment of $8100.
Means total amount paid back was = $8100
And original principle was = $3500
So, interest paid = [tex]8100-3500=4600[/tex] dollars
Now simple interest formula is :
[tex]I=p\times r\times t[/tex]
Where p = 3500
I = 4600
r = ?
t = 10
Now putting these values in formula we get;
[tex]4600=3500\times r\times10[/tex]
[tex]r=4600/35000[/tex]
r= 0.1314
So, rate of interest = 13.14%
