What is the interest rate on the loan

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Question: This question illustrates what is known as discount interest. Imagine you are discussing a loan with a somewhat unscrupulous lender. You want to borrow $27,000 for one year. The interest rate is 19 percent. You and the lender agree that the interest on the loan will be .19 × $27,000 = $5,130. So, the lender deducts this interest amount from the loan up front and gives you $21,870. In this case, we say that the discount is $5,130. What is the interest rate on this loan? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Interest rate %

Reference no: EM132067283

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