A person borrowed some money on simple interest. After 4 years, he returned (9/5) of the money to the lender. What was the rate of interest?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. 20% p.a.
Let the money borrowed be 100 units
Amount = 100 × 9/5 = 180 units
Simple interest = 180 - 100 = 80 units
Simple interest = PRT/100
⇒ 80 = (100 × R × 4)/100
⇒ R = 80/4 = 20% p.a.