A simple interest of Ghc 37,500.00 is earned on an amount of Ghc 500,000.00 for three years. Find the rate of interest per annum?

2.5%

Step-by-step explanation:

A simple interest of Ghc 37,500.00 is earned on an amount of Ghc 500,000.00 for three years. Find the rate of interest per annum?

The formula for Rate of Interest in a simple interest is given as:

r = (1/t)(A/P - 1)

Where

t = time in years = 3 years

P = Principal = Initial amount invested = Ghc 500,000.00

A = Amount after t years =

Principal + Simple Interest

= Ghc 500,000.00 + Ghc 37,500.00

= Ghc 537,500.00

Hence:

The rate of interest = (1/3) × (Ghc 537,500.00/Ghc 500,000.00 - 1)

= r = 0.025

Converting r decimal to R a percentage

R = 0.025 × 100 = 2.5%/year

Therefore, the rate of interest per annum is 2.5%

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step-by-step explanation:

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