At what rate would a sum of N100.00 be deposited for 5 years raise an interest of N7.50
Explanation
To determine the rate at which a sum of N100.00 would need to be deposited for 5 years to raise an interest of N7.50, follow these steps:
1. Use the simple interest formula:
\[
I = P \times r \times t
\]
where:
- \(I\) is the interest (N7.50),
- \(P\) is the principal amount (N100.00),
- \(r\) is the rate (expressed as a decimal),
- \(t\) is the time in years (5 years).
2. Substitute the known values into the formula:
\[
7.50 = 100 \times r \times 5
\]
3. Solve for \(r\):
\[
7.50 = 500r
\]
\[
r = \frac{7.50}{500} = 0.015
\]
Convert \(r\) to a percentage:
\[
r = 0.015 \times 100\% = 1.5\%
\]
So, the correct answer is:
C. 1.5%
