Single correct option
A sum of money at simple interest amounts to ₹7,200 in 3 years and to ₹8,400 in 5 years. The rate of interest per annum is
- A. 11 1/9 %
- B. 10%
- C. 12.5%
- D. 9 1/11 %
Show answer and solution
Answer: (A) 11 1/9 %
Interest for the 2 years between year 3 and year 5 = 8,400 − 7,200 = ₹1,200, so interest per year = ₹600.
Principal = 7,200 − 3 × 600 = ₹5,400.
Rate = 600/5,400 × 100 = 100/9 = 11 1/9 %.
Tip: Under simple interest, the amount grows by the same fixed interest every year, so the difference between two amounts divided by the gap in years gives the annual interest directly.
Principal = 7,200 − 3 × 600 = ₹5,400.
Rate = 600/5,400 × 100 = 100/9 = 11 1/9 %.
Tip: Under simple interest, the amount grows by the same fixed interest every year, so the difference between two amounts divided by the gap in years gives the annual interest directly.
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