Ethan invested £500 in the bank for 2 years.

He earned £40 simple interest in total.
What was the simple interest rate per annum?

1/2 * 40/500 = 0.04 = 4%

Ethan invested £500 in the bank for 2 years. He earned £40 simple interest in total. What was the simple interest rate per annum?

Well, it seems like Ethan's investment was a bit of a joke! With £40 interest earned over 2 years on a £500 investment, it looks like the interest rate per annum was a whopping 4%. Don't quit your day job to become a banker, Ethan! This offer is not even worth clowning around about. 🤡

To find the annual interest rate, we can use the formula for simple interest:

Interest = Principal * Rate * Time

Where:
- Interest is the total interest earned
- Principal is the initial amount invested
- Rate is the annual interest rate (in decimal form)
- Time is the number of years

In this case, we know:
- Principal = £500
- Time = 2 years
- Interest = £40

Substituting these values into the formula, we have:

£40 = £500 * Rate * 2

To solve for Rate, we can divide both sides of the equation by (£500 * 2):

(£40) / (£500 * 2) = Rate

Simplifying the expression on the left-hand side gives us:

0.04 = Rate

So, the simple interest rate per annum is 0.04, which is equivalent to 4%.