Answer:
Rate of simple interest per year = 6%
It means that every year an amount equal to simple interest per year times of investment is earned by the investor.
Explanation:
We have I = prt, where I represents simple interest, p represents principal, r represents interest rate, and t represents time in years.
Here principal, p = 1000 $
Number of years , t = 2 years
Interest received, I = 120$
We need to find rate of interest.
Substituting
120 = 1000 x r x 2
r = 120/2000 = 0.06 = 6%
Rate of simple interest per year = 6%
It means that every year an amount equal to simple interest per year times of investment is earned by the investor.
