Jim has a credit rating of 620. Sally has a credit rating of 740. Jim and Sally apply for identical loans from Smart Bank. Jim is approved for a loan at 7.2% interest, and Sally is approved for a loan that charged 2 percentage points lower because of her good credit rating. a. What interest rate is Sally charged?

Step-by-step explanation:

Solve this by using natural logs.  Taking the natural log of both sides:

To undo the multiplication, we use addition:

The rule says we can now bring the exponent down in front of the ln:

Now we will subtract ln(7) from both sides:

(8x - 8)ln(16) = ln(3) - ln(7)

Now we will divide both sides by ln(16):

then add 8 to both sides:

which simplifies to

8x = 7.694401895 so

x = .9618002368 or, rounded,

x = .96

(Rest assured I did the math and checked the answer and it checked out perfectly!)  I recommend you learn the laws of natural and common logs cuz they're kinda important!! :)