Final answer:
The annual interest rate is found by rearranging the simple interest formula and using the given values, resulting in an annual interest rate of approximately 0.915%.
Step-by-step explanation:
To find the annual interest rate, we need to use the formula for calculating simple interest, which is:
Interest = Principal × rate × time
First, convert the time given in months to years since the interest rate is annual. Since there are 12 months in a year, 118 months is approximately 9.83 years (118 months ÷ 12 months/year).
Now we can rearrange the simple interest formula to solve for the rate:
rate = Interest ÷ (Principal × time)
Inserting the given values:
rate = $18 ÷ ($200 × 9.83 years)
rate = $18 ÷ $1966
rate = 0.00915 (or 0.915%)
Therefore, the annual interest rate is approximately 0.915%.