Find the rate if the simple interest on #5000 for 4 years is #500

Answer 1

To find the rate of simple interest, we can use the formula for simple interest, which is:

\[ I = P \times R \times T \]

Where:
- \( I \) is the interest
- \( P \) is the principal amount
- \( R \) is the rate of interest (expressed as a decimal)
- \( T \) is the time period in years

Given:
- The interest \( I = \#500 \)
- The principal amount \( P = \#5000 \)
- The time period \( T = 4 \) years

We need to find the rate \( R \).

First, rearrange the simple interest formula to solve for \( R \):

\[ R = \frac{I}{P \times T} \]

Now substitute the given values into the equation:

\[ R = \frac{500}{5000 \times 4} \]

\[ R = \frac{500}{20000} \]

\[ R = 0.025 \]

To express this as a percentage, multiply by 100:

\[ R \times 100 = 0.025 \times 100 = 2.5\% \]

So, the rate of simple interest is \( 2.5\% \).