It is 20 minutes before 8:00 am in the morning. What time is this?
1 answer:
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The annual interest rate is 3.5%.
Solution:
Given Interest (I) = $26.25
Principal (P) = $500
Time (t) = 18 months
Rate of interest (r) = ?
Time must be in years to find the rate per annum.
1 year = 12 months
Divide the time by 12.
Time (t) = years
Now, find the rate of interest using simple interest formula.
<u>Simple interest formula:</u>
⇒ r = 3.5%
Hence the annual interest rate is 3.5%.