Find the simple interest rate percent annum at which N1000 accumulates to N1240 in 3 years.
Question 1 Report
Find the simple interest rate percent annum at which N1000 accumulates to N1240 in 3 years.
Answer Details
Simple interest is the interest calculated on the original amount of a loan or deposit, without taking into account any compound interest. To find the simple interest rate at which N1000 accumulates to N1240 in 3 years, we can use the formula for simple interest:
I = Prt
where I is the interest, P is the principal (original amount), r is the interest rate, and t is the time in years.
We know that I = N1240 - N1000 = N240, and t = 3 years.
So, we can plug in these values into the formula and solve for r:
N240 = N1000 x r x 3
Dividing both sides by N1000 x 3, we get:
r = N240 / (N1000 x 3) = 0.08
So, the interest rate is 8%.
So, the answer is 8%.
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