HOW DO I CALCULATE THIS PERCENTAGE?

I am perplexing to work out what the commission would be in this scenario. I am borrowing 50k from an investor. as well as returning 70k behind in 23.3 months. Basically the 20k distinction in the small underneath 2 years. What commission has the financier warranted upon his strange 50k investment? And how do I arrive during the right percentage?

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{ 3 comments… read them below or add one }

Will October 27, 2010 at 2:57 am

He originally gave you 50,000 and he will receive 70,000 back. So we need to find out what percent of 50,000 is 70,000. Lets say the percent is X.

50,000 * X = 70,000
X = 70,000 / 50,000
X = 1.4

Now lets just convert that to percentage and we get 140%, so he will get 40% more of his money back after the 23.3 months.

Nisha October 27, 2010 at 3:08 am

70/50 –> 1.4 – 1 (what you borrowed) = .4 —> 40% (interest)

Fred S October 27, 2010 at 3:16 am

Use the following formula in Excel:
=RATE(23.3/12,0,50000,-70000)

Answer: APR = 18.9%

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