Question

Find the annual simple interest where I = $27, P = $509, and t = 2 years.

a) 0.05.
b) 0.1.
c) 5.
d) 10.

Answer 1

To find the annual simple interest, use the formula I = P * r * t. Substituting the given values, we can find that the interest rate is 0.0265 or 2.65%.

Step-by-step explanation:

To find the annual simple interest, we can use the formula I = P * r * t, where I is the interest, P is the principal amount, r is the interest rate, and t is the time in years.

In this case, P = $509 and t = 2 years. We need to solve for r.

Substituting the given values, I = $27, P = $509, and t = 2, we have:

$27 = $509 * r * 2

Simplifying, we get:

r = $27 / ($509 * 2)

r = 0.0265

So, the interest rate is 0.0265 or 2.65%