If ₦225.00 yields ₦27.00 in x years simple interest at the rate of 4% per annum, find x

Answer Details

To solve this problem, we use the formula for simple interest: I = P*r*t Where: I = Interest earned P = Principal amount r = Rate of interest per year (as a decimal) t = Time period in years In this case, we are given: P = ₦225.00 (the principal amount) I = ₦27.00 (the interest earned) r = 4% = 0.04 (the rate of interest per year) Substituting these values into the formula, we get: 27 = 225 * 0.04 * t Simplifying the equation, we have: 27 = 9t Dividing both sides by 9, we get: t = 3 Therefore, the answer is 3 years. Explanation: The interest earned on the principal amount of ₦225.00 is ₦27.00. This means that for every year, the interest earned is 27/225 = 0.12 or 12% of the principal amount. We know that the rate of interest per year is 4%, which is much lower than the interest earned per year of 12%. This means that it will take more than 1 year for the interest earned to reach the rate of interest. In fact, it takes 3 years for the interest earned to reach the rate of interest of 4%, which is why the answer is 3.