Subjects finance

Simple Interest Ecce22

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1. **Problem statement:** Kwesi borrowed 1800 at simple interest for 3 years and paid a total of 2070. We need to find the simple interest paid and the rate of interest per annum. 2. **Formula for simple interest:** $$SI = P \times r \times t$$ where $SI$ is simple interest, $P$ is principal, $r$ is rate per annum (in decimal), and $t$ is time in years. 3. **Calculate simple interest paid:** Total amount paid = Principal + Simple Interest $$2070 = 1800 + SI$$ $$SI = 2070 - 1800 = 270$$ 4. **Calculate rate of interest per annum:** Using formula: $$270 = 1800 \times r \times 3$$ Divide both sides by $1800 \times 3$: $$r = \frac{270}{\cancel{1800} \times 3} = \frac{270}{\cancel{1800} \times 3}$$ Simplify numerator and denominator: $$r = \frac{270}{5400} = 0.05$$ Convert to percentage: $$r = 0.05 \times 100 = 5\%$$ **Final answers:** - Simple interest paid = 270 - Rate of interest per annum = 5%