Determine the interest rate on the note: to simplify the arithmetic in the problem, use 360 days for the number of days in a year. In this problem, we are to solve for the rate (annual interest percentage changed)of the note. The basic formula we use to determine interest is:
Interest=Principal* Rate*time
The principal is the face value of the note. The rate is the annual percentage charge over the term of the note. The time is the number of years or the fraction of a year before the note is due.
We will now solve for the rate of the note.Since we know the amount of interest ($31.5), the principal ($6,300), and the term (30 days)in this problem, we can restate the formula as follows: