Ace Your Future: FBLA Business Calculations Practice Test 2025 – Boost Your Biz Brilliance!

To determine the interest rate when borrowing a certain amount and paying a specified interest, the formula to use is:

Interest Rate = (Interest Paid / Principal) × 100

In this case, the principal amount is $2000, and the interest paid is $180. Plugging these values into the formula gives:

Interest Rate = ($180 / $2000) × 100

Calculating this yields:

Interest Rate = 0.09 × 100 = 9%

This means that the interest rate on the borrowed amount is 9%. This calculation demonstrates how to derive the interest rate by assessing the direct relationship between the interest paid and the borrowed principal, allowing one to express it as a percentage of the principal amount. Understanding how to calculate interest rates is crucial in various financial contexts such as loans, credit, and investments.