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If N2,500.00 amounted to N3,50.00 in 4 years at simple interest, find the rate a...


Question

If N2,500.00 amounted to N3,50.00 in 4 years at simple interest, find the rate at which the interest was charged

Options

A) 5%

B) 7\(\frac{1}{2}\)%

C) 8%

D) 10%

The correct answer is D.

Explanation:

A = 3,500, P = N2,500

A = P + I

But I = N3,500 - N2,500

I = N1,000

I = \(\frac{PRT}{100}\)

N1,000 = \(\frac{2.500 \times R \times 4}{100}\)

1000 = 100R

R = \(\frac{1000}{100}\)

= 10%


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Dicussion (1)

  • A = 3,500, P = N2,500

    A = P + I

    But I = N3,500 - N2,500

    I = N1,000

    I = \(\frac{PRT}{100}\)

    N1,000 = \(\frac{2.500 \times R \times 4}{100}\)

    1000 = 100R

    R = \(\frac{1000}{100}\)

    = 10%