Question

In how many years will 5000 Ghana cedis yield a simple interest of 1000 Ghana cedis at the rate of 5% per annum?

A) 5 years
B) 10 years
C) 15 years
D) 20 years

Answer 1

Using the simple interest formula, it will take 4 years for 5000 Ghana cedis to yield a simple interest of 1000 Ghana cedis at a rate of 5% per annum, which is not listed among the provided options.

Step-by-step explanation:

To calculate the number of years it takes for a Ghana cedis loan to yield a specific amount in simple interest, you can use the formula for simple interest: I = P × R × T

Where,

• I is the interest,
• P is the principal amount,
• R is the rate of interest per annum (in decimal form),
• T is the time in years.

In this case, we are looking to find T when the interest (I) is 1000 Ghana cedis, the principal (P) is 5000 Ghana cedis, and the annual interest rate (R) is 5% or 0.05 in decimal form.

Plugging these values into the formula, we get:

1000 = 5000 × 0.05 × T

Let's solve for T:

1000 = 250T

T = × × years

Therefore, it will take 4 years for 5000 Ghana cedis to yield a simple interest of 1000 Ghana cedis at the rate of 5% per annum. The correct answer is not listed among the options.