Question

Find the annual interest rate. Simple Interest = $24, P = $400, t = 2 years

Answer 1

Step-by-step explanation

We are given the following data

`\begin{gathered} Simple\text{ Interest}=\text{ \$24} \\ \text{Principal=\$400} \\ t=2\text{ years} \end{gathered}`

To compute the rate, we will use the formula

`\text{Simple interest=}\frac{Pri\text{ncipal}* Rate* Time}{100}`

We will make the rate the subject of the formula

`\text{Rate}=\frac{\text{simple Interest}*100}{Prin\text{cipal}* Time}`

The next step will be to substitute the values into the formula above

`\begin{gathered} \text{Rate}=(24*100)/(400*2)=(2400)/(800)=3 \\ \\ \text{Rate}=3\text{ \%} \end{gathered}`

Thus, the annual rate is 3%