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Billy invests £800 for 5 years in a savings account.

By the end of the 5 years he has received a total of £96 simple interest.
Work out the annual rate of simple interest.

Respuesta :

Answer:

2.4%

Step-by-step explanation:

Simple interest (I) is calculated as

I = [tex]\frac{PRT}{100}[/tex]

where P is the principal, R the rate of interest and T time in years

Here I = 96, P = 800 and T = 5, thus

96 = [tex]\frac{800R(5)}{100}[/tex] = [tex]\frac{4000R}{100}[/tex] = 40R ( divide both sides by 40 )

R = [tex]\frac{96}{40}[/tex] = 2.4%

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