Answer :
Answer:
The annual interest rate of the loan was of 0.07 = 7%.
Step-by-step explanation:
This is a simple interest problem.
The simple interest formula is given by:
[tex]E = P*I*t[/tex]
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.
After t years, the total amount of money is:
[tex]T = E + P[/tex].
In this problem, we have that:
4 years, so [tex]t = 4[/tex]
Loan of 300, so [tex]P = 300[/tex]
Interest of 84, so [tex]E = 84[/tex]
We have to find I.
[tex]E = P*I*t[/tex]
[tex]84 = 300*I*4[/tex]
[tex]I = \frac{84}{300*4}[/tex]
[tex]I = 0.07[/tex]
The annual interest rate of the loan was of 0.07 = 7%.