Mathematics
Grade-7
Easy
Question
Determine the simple interest on £4000 principal at 4% per annum over a period of 5 years.
- £800
- £160
- £500
- £320
Hint:
Interest rate is the difference between the final amount and the principle amount. The time in the equation should be given in years.
The correct answer is: £800
Simple interest, I = PRT
P=£4000, r=4%= 0.04 and t= 5 years. Substituting the values, we get:
I = 4000 × 0.04 x 5 = £ 800
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