Answer:
the annual interest rate is 4%.
Explanation:
To determine the annual interest rate, we need to use the formula for simple interest:
I = P * r * t
where I is the interest earned, P is the principal amount (the amount borrowed or invested), r is the annual interest rate as a decimal, and t is the time period in years.
In this case, we are given that the interest earned is $16, the principal amount is $200, and the time period is 2 years. Plugging in these values and solving for r, we get:
16 = 200 * r * 2
16 = 400r
r = 16/400
r = 0.04 or 4%
Therefore, the annual interest rate is 4%.