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The simple interest rate per year required to accumulate the same amount of money in 2 years at 20% per year compound interest is ___________

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Answer: 22%

Explanation:

Compound interest at 20% per year for 2 years is;

= (1 + 20%)² - 1

= 1.44 - 1

= 44%

The simple interest in 2 years will also be 44% for it to be equivalent.

For the yearly simple interest rate simply divide by 2 because simple interest does not get compounded.

= 44%/2

= 22%

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