Answer:
4%
Explanation:
As indicated in the question, this is a simple interest question.
The formula for Simple Interest =
I = Principal × Rate × Time
In the above question, we were given the following values.
A = Total value / amount of money = $50000
Principal = $46875
Rate = ??
Time = 1 yr and 8 months
= 1 year +(8/12)
Time = 1.6666666667 years
We are asked to solve for the rate interest per year. Hence, the formula to use to solve this question is given as:
r = (1/t)(A/P - 1)
r = (1/1.6666666667)(50000/46875 - 1)
r = 0.04
Converting to percentage, rate = 0.04 × 100 = 4%
Therefore, the rate interest per year is 4%