Final Answer:
The rate of interest on the principal sum of $28000, earning $2800 in interest over 2 years, is calculated at 5% per annum.
Explantion:
Given:
Principal amount (P) = $28000
Interest earned (I) = $2800
Time (T) = 2 years
The formula for simple interest is:
Simple Interest ={P *R*T}/100
We're solving for the rate of interest (R).
First, let's rearrange the formula to solve for the rate:
Rate (R) = 100 *Interest / Principal * Time}
Substitute the given values:
Rate (R) =100*2800 / 28000 * 2
Simplify the expression:
Rate (R)} = 280000/56000
Rate (R)} = 5
Therefore, the rate of interest is 5%.
To summarize, the steps involve setting up the formula for simple interest, rearranging it to solve for the rate, substituting the given values, and then performing the calculation to determine that the rate of interest is 5% per annum.