Answer:
Annual Interest Rate = 3%
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:
[tex]\begin{gathered} \text{We will use the formula for calculating ''Simple Interest'' given as:} \\ SI=P\times R\times T \\ \text{We will substitute the value of the variables into the formula, we have:} \\ 24=400\times R\times2 \\ 24=800\times R \\ \text{To obtain ''R'', we will divide both sides by ''800''. We have:} \\ \frac{24}{800}=\frac{800\times 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\times100\text{\%} \\ R=3\text{\%} \\ \\ \therefore Rate=3\text{\%} \end{gathered}[/tex]Therefore, the annual interest rate is 3%
