To find the simple interest rate, we can use the formula for simple interest:

$I = P \times r \times t$

where:

• $I$ is the interest paid,
• $P$ is the principal (initial amount borrowed),
• $r$ is the interest rate per time period (which we need to find),
• $t$ is the time in years.

First, calculate the interest paid: $I = 920 - 870 = 50$

Now, convert the time to years, since simple interest rates are typically annual. Since 3 months is $\frac{3}{12} = 0.25$ years, we can substitute into the simple interest formula:

$50 = 870 \times r \times 0.25$

Solve for $r$:

$r = \frac{50}{870 \times 0.25} = \frac{50}{217.5} \approx 0.23$

Thus, the simple interest rate is approximately $23\%$ per year.

Would you like more details or have any questions?

Here are 5 related questions:

1. How does compound interest differ from simple interest?
2. If the loan term were extended to 6 months, how would the interest rate change?
3. What would be the total amount paid if the interest rate were reduced to 18%?
4. How would you calculate interest if payments were made monthly instead of after 3 months?
5. What is the formula for compound interest, and how does it apply to loans?

Tip: Always convert time into the same units (usually years) when calculating interest rates.