Question

Annual interest rate I:$24 P:$400 T: 2 years

Answer 1

Annual Interest Rate = 3%

Step-by-step explanation:

We are given the following information:

Interest, I = $24

Principal, P = $400

Time, T = 2 years

Rate, R = ?

To obtain the annual interest rate, we will follow the steps enumerated below:

`\begin{gathered} \text{We will use the formula for calculating ''Simple Interest'' given as:} \\ SI=P* R* T \\ \text{We will substitute the value of the variables into the formula, we have:} \\ 24=400* R*2 \\ 24=800* R \\ \text{To obtain ''R'', we will divide both sides by ''800''. We have:} \\ (24)/(800)=(800* R)/(800) \\ 0.03=R\Rightarrow R=0.03 \\ R=0.03 \\ \text{Expressing the value in percentage, we will multiply by 100\%, we have:} \\ R=0.03*100\text{\%} \\ R=3\text{\%} \\ \\ \therefore Rate=3\text{\%} \end{gathered}`

Therefore, the annual interest rate is 3%