Question

If anyone could help with this question here it would mean so much, I can't work out the answer. Could you also provide a explanation|?

Billy invests £800 for five years in a savings account. By the end of the five years he has received a total of £96 pound interest. Work out the annual rate of simple interest.

Answer 1

The rate is 2.4% per year.

Explanation:

The basic formula is Dividend equals Principal times rate times time.

Time is usually the number of years

Dividend means the same as Interest, but we can use D instead if I which is confusing. So D=Prt

Principal is the original amount invested or deposited

You are given D = 96, P = 800 t = 5

r is unknown, that's what you have to solve to find

Put the numbers into the formula: 96 = (800) × r × (5)

Divide: 96/(800)(5) =r That's 96 ÷ 4000 = r Calculate that to get 0.024 and change the decimal to a percent.

That means the rate of interest is 2.4%