Question

A man invested N80 at a certain rate of simple interest. If at the end of 5 years the money amounted to N88, what was the rate of simple interest paid?

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Answer 1

9514 1404 393

Answer:

2%

Explanation:

The amount of interest is the difference between the total amount and the principal amount:

N88 -N80 = N8 . . . . the amount of interest

The interest amount is given by the formula ...

I = Prt

Solving for r, we find ...

r = I/(Pt) = 8/(80×5) = 1/50 = 2%

The rate of simple interest paid was 2%.