Answer
4 %
Explanation
Given:
Principal, P = $400
Interest, I = $32
Time,T = 2 years
What to find:
Annual interest rate, R
Step-by step solution:
The simple interest formula is given by:
[tex]I=\frac{\text{PRT}}{100}[/tex]Substituting P = 400, I = 32, and T = 2 into the formula:
[tex]\begin{gathered} 32=\frac{400\times R\times2}{100} \\ 800R=3200 \\ R=\frac{3200}{800} \\ R=4\text{ \%} \end{gathered}[/tex]