Answer:
the annual rate of interest is 7.8%
Step-by-step explanation:
The computation of the annual rate of interest is as follows:
As we know that
Simple interest = Principal × rate × time
$195 = $6,000 × rate × 5 months ÷ 12 months
$195 = 25 × rate
Rate = $195 ÷ 25
= 7.8%
Hence, the annual rate of interest is 7.8%
We simply applied the above formula so that the correct value could come
And, the same is to be considered
