Given:
The interest amount is I = $18.
The principal amount is P = $200.
The number of years is T = 18 months.
The objective is to find the annual interest rate (R).
Explanation:
The general formula to find the interest rate is,
[tex]\begin{gathered} I=\frac{P\times R\times T}{100} \\ R=\frac{I\times100}{P\times T}\text{ . . . . . . . (1)} \end{gathered}[/tex]The value of T in years can be written as,
[tex]T=\frac{18}{12}[/tex]On plugging the obtained values in equation (1),
[tex]R=\frac{18\times100}{200\times\frac{18}{12}}[/tex]On further solving the above equation,
[tex]\begin{gathered} R=\frac{18\times100\times12}{200\times18} \\ =\frac{12}{2} \\ =6\text{ \%} \end{gathered}[/tex]Hence, the annual interest rate is 6%.Hence, the annual interest rate is 6%.Hence, the annual interest rate is 6%.
