Answer
The annual interest rate is 4%.
Work Step by Step
The interest formula is: i = P $\times$ r $\times$ t.
To find the annual interest rate, or r, we divide i by P $\times$ t
So, r = $\frac{i}{P\ \times\ t}$
P = 7500
i = 1200
t = 4
Substitute these values into the formula to obtain the annual interest rate.
r = $\frac{1200}{7500\times4}$
r = $\frac{1200}{30000}$
r = 0.04
We multiply .04 by 100% to convert it to a percent.
r = 0.04 $\times$ 100% = 4%
The annual interest rate is 4%.
