How do I find out what the interest rate is when I know how much interest is charged on a balance due?

Answers

Charles Wang, Data Scientist at Noodle Education

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Depends on whether you are dealing with simple or compound interest.

The equation for simple interest is:

I = P(1 + rt)

Do the algebra: Divide both sides by the principle (P) Subtract one (1) from both sides *Divide both sides by time (t)

That gets you the interest rate, (r).

For compound interest:

I = P(1 + r)^t

Divide both sides by the principle (P) Take the t-th root of both sides *Subtract one (1) from both sides

Good luck.

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