At what rate would a sum of ₦100.00 deposited for 5 years raise an interest of ₦7.50?

At what rate would a sum of ₦100.00 deposited for 5 years raise an interest of ₦7.50?

Answer Details

To calculate the interest rate that would raise a sum of ₦100.00 deposited for 5 years to an interest of ₦7.50, we need to use the formula: Simple Interest = (Principal * Rate * Time) / 100 Where: - Principal = ₦100.00 - Simple Interest = ₦7.50 - Time = 5 years By substituting the values in the formula, we get: ₦7.50 = (₦100.00 * Rate * 5) / 100 Simplifying the equation, we get: Rate = (₦7.50 * 100) / (₦100.00 * 5) Rate = 1.5% Therefore, the interest rate that would raise a sum of ₦100.00 deposited for 5 years to an interest of ₦7.50 is 1.5%.