A loan of ₱8,000 earned ₱1,200 simple interest in 3 years. What was the annual interest rate?
Correct answer: A. 5%
Rate = interest ÷ (principal × time) = 1,200 ÷ (8,000 × 3) = 1,200 ÷ 24,000 = 0.05, or 5%. The 15% option is the total interest over three years, not the yearly rate.
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