Carol Miller went to Europe and forgot to pay her $1,000 mortgage payment on her New Hampshire ski house. For her 25 days overdue on her payment, the bank charged her a penalty of $5. What was the rate of interest charged by the bank? (Use 360 days a year. Do not round your intermediate calculations. Round your answer to the nearest hundredth percent.)

assuming simple interest,

1000 * r/360 * 25 = 5
r = .0720 = 7.20%

To find the rate of interest charged by the bank, we can calculate the effective annual interest rate by considering the penalty charged for the 25 days overdue.

First, let's calculate the penalty interest charged per day:
Penalty interest charged per day = Penalty / Number of days
= $5 / 25 days
= $0.20 per day

Next, let's calculate the annual interest charged on the overdue amount:
Annual interest charged = Penalty interest charged per day * Number of days in a year
= $0.20 * 360
= $72

Now, let's calculate the rate of interest charged by the bank:
Rate of interest = (Annual interest charged / Loan amount) * 100%
= ($72 / $1,000) * 100%
= 7.2%

Therefore, the bank charged an interest rate of 7.2%.

To determine the rate of interest charged by the bank, we need to calculate the effective interest rate on the $1,000 mortgage payment for being 25 days overdue.

First, we need to determine the daily interest rate. Since we are using a 360-day year, we divide the annual interest rate by 360.

Next, we calculate the interest charged for being 25 days overdue. We multiply the daily interest rate by the number of days overdue:

Daily interest rate = Annual interest rate / 360
Interest charged = Daily interest rate * Number of days overdue

Finally, we calculate the rate of interest as a percentage by dividing the interest charged by the mortgage amount and multiplying by 100:

Rate of interest = (Interest charged / Mortgage amount) * 100

Let's plug in the values:

Annual interest rate = ?
Number of days overdue = 25
Mortgage amount = $1,000
Penalty fee = $5

We need to find the annual interest rate, so we rearrange the formula to solve for it:

Annual interest rate = (Rate of interest * Mortgage amount) / 100

Substituting the known values:

Annual interest rate = ((Interest charged + Penalty fee) * 100) / Mortgage amount

Now we can calculate the interest charged:

Daily interest rate = Annual interest rate / 360
Interest charged = Daily interest rate * Number of days overdue

Let's calculate the daily interest rate:

Daily interest rate = Annual interest rate / 360
= (Annual interest rate) / 360

Now plug the values into the formula:

Daily interest rate = (Annual interest rate) / 360

Since we can't determine the exact annual interest rate, we can simplify the equation by multiplying both sides by 360 to get:

Annual interest rate = Daily interest rate * 360

Now we use this equation to calculate the daily interest charge:

Interest charged = Daily interest rate * Number of days overdue
= (Annual interest rate / 360) * Number of days overdue
= ((Annual interest rate * Number of days overdue) / 360)

Now we have the interest charged. Let's plug in the values and calculate:

Interest charged = ((Annual interest rate * Number of days overdue) / 360)
= ((Annual interest rate * 25) / 360)

Now we can calculate the rate of interest:

Rate of interest = (Interest charged / Mortgage amount) * 100

Plug in the values and calculate:

Rate of interest = (((Annual interest rate * 25) / 360) / $1,000) * 100

Since we are rounding to the nearest hundredth percent, the final answer would be:

Rate of interest = (((Annual interest rate * 25) / 360) / $1,000) * 100, rounded to the nearest hundredth percent.