Explanation
We are given the following data
[tex]\begin{gathered} Simple\text{ Interest}=\text{ \$24} \\ \text{Principal=\$400} \\ t=2\text{ years} \end{gathered}[/tex]To compute the rate, we will use the formula
[tex]\text{Simple interest=}\frac{Pri\text{ncipal}\times Rate\times Time}{100}[/tex]We will make the rate the subject of the formula
[tex]\text{Rate}=\frac{\text{simple Interest}\times100}{Prin\text{cipal}\times Time}[/tex]The next step will be to substitute the values into the formula above
[tex]\begin{gathered} \text{Rate}=\frac{24\times100}{400\times2}=\frac{2400}{800}=3 \\ \\ \text{Rate}=3\text{ \%} \end{gathered}[/tex]Thus, the annual rate is 3%
