Answer:
Annual interest rate = 4%
Step-by-step explanation:
We are given;
Principal; P = $20000
Interest; I = $1600
Period; T = 2 years
Formula for simple interest is;
I = PRT
Making R, rate the subject of the formula gives;
R = I/PT
Plugging in the relevant values gives;
R = (1600)/(20000 × 2)
R = 0.04
In percentage form, R = 4%
