SOLUTION: A man invests N1800 at simple interest. After 2 years th amount (including interest) is N1980. Fine the rate perbent per annum
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Question 1026990: A man invests N1800 at simple interest. After 2 years th amount (including interest) is N1980. Fine the rate perbent per annum
Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
simple interest formula ia:
i = p * r * n
i = interest
p = principal
r = rate of interest per time period
n = number of time periods
man invests 1800
after 2 years he has 1980
his interest earned is 1980 - 1800 = 180.
you get:
p = 1800
i = 180
n = 2
formula of i = p * r * n becomes:
180 = 1800 * r * 2
solve for r to get r = 180 / 1800 / 2 = .05
his interest rate is .05 per year.
that's 5% per year.
at 5% interest per year, he makes 1800 * .05 = 90 interest each year.
in 2 years that becomes 180.
with simple interest, you are only earning interest on the original principal each other.
this gives you the same amount of interest each year.
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