If the simple interest on $900 for 3 years is $108, what is the rate of interest per annum?

• A. 2%
• B. 3%
• C. 4%
• D. 5%

Answer: (C)

To find the rate of interest per annum when given the simple interest, we can use the formula for simple interest:

[

I = P \times r \times t

]

where:

• ( I ) is the interest earned (which is $108 in this case),

• ( P ) is the principal amount (which is $900),

• ( r ) is the rate of interest (expressed as a decimal),

• ( t ) is the time in years (which is 3 years).

First, we rearrange this formula to solve for the rate ( r ):

[

r = \frac{I}{P \times t}

]

Substituting in the known values:

[

r = \frac{108}{900 \times 3}

]

Calculating the denominator:

[

900 \times 3 = 2700

]

Now substituting back into the equation for ( r ):

[

r = \frac{108}{2700}

]

Calculating the value of ( r ):

[

r = 0.04

]

To express this as a percentage, we multiply by 100:

[

r \times