Calculating Borrower's Interest Rate on a Loan

If a borrower computed the interest charged for the previous month on his $60,000 loan balance as $412.50, what is the borrower's interest rate?

Based on the fact that borrower was charged $412.50 on his balance of $60,000, the interest rate is 8.25%.

What is the interest rate?

The interest amount is monthly so the yearly amount is:

= 412.50 x 12

= $4,950

The borrower's interest rate is:

= 4,950 / 60,000 x 100%

= 8.25%

In conclusion, the borrower's interest rate is 8.25%.