At what rate will the interest on N400 increases to N24 in 3 years reckoning in simple interest?

Analyze the question: We need the rate (R) at which a principal of N400 earns N24 simple interest in 3 years.

Concept: Simple Interest formula:

I = (P × R × T) / 100

so R = (I × 100) / (P × T)

Solution:

• P = N400
• I = N24
• T = 3 years

R = (24 × 100) / (400 × 3) R = 2400 / 1200 R = 2%

Check: (400 × 2 × 3) / 100 = 2400 / 100 = N24 ✓

Answer: The rate is 2%, which is option B.

Tip: Simplify before multiplying. Here 24/(400×3) = 8/400 = 1/50, and 1/50 × 100 = 2%. Always plug your answer back into the formula to confirm it quickly in the exam hall.