Question

What was the annual interest rate?

Answer 1

The rate at which the loan was given is 4%

Explanation:

Given in question as

The Amount loaned to his niece = $ 1200

Time period of loan = 2 years

Interest calculate at Simple interest method = $96

Now Let the Rate of interest apply = R

So, From Simple Interest formula :

SI =
`(Principal * Rate * Time)/(100)`

Or, 96 =
`(1200 * Rate * 2)/(100)`

Or, Rate =
`(96)/(24)`

I.e Rate = 4%

Hence The rate at which the loan was given is 4% Answer