Question

Find the simple interest on N300 for 2.5 years at a 10% rate.

(a) N75
(b) N125
(c) N70
(d) N175

Answer 1

To find the simple interest, use the formula I = P × R × T. For a principal of N300, a rate of 10%, and a time of 2.5 years, the interest is N75.

Step-by-step explanation:

To find the simple interest on a principal amount using the simple interest formula, you can use the equation: Interest (I) = Principal (P) × Rate (R) × Time (T), where the rate is in decimal form. In this question, we are given a principal amount of N300, an interest rate of 10%, and a time duration of 2.5 years.

First, convert the interest rate from a percentage to a decimal by dividing by 100. Therefore, 10% becomes 0.10. Then, using the formula:

I = P × R × T

I = N300 × 0.10 × 2.5

I = N300 × 0.25

I = N75

The simple interest accrued over this period is N75. Therefore, the correct answer is (a) N75.