Answer: 12%
Explanation:
It would be easier to assume a certain number when answering such questions.
Assume for instance, that the sum of money is $1,000.
In 5 years it increased by 8/5:
= 1,000 * 8/5
= $1,600
In 5 years this figure increased to $1,600. Increase was:
= 1,600 - 1,000
= $600
Simple interest is the same every year so the interest per year was:
= 600/5
= $120
Rate = 120 / 1,000
= 12%
Faster method.
= 8/5
= 1.6
Sum increased by 1.6 which means interest over 5 years was:
= 1.6 - 1
= 60%
Rate = 60%/ 5 years
= 12%
