A sum amounts to ₹7,656 in 4 years and to ₹8,120 in 5 years at a certain simple interest rate percent per annum. The rate of interest is:
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. 8%.
Given that
In 5 years, Amount = ₹8,120
In 4 years, Amount = ₹7,656
As we know,
Amount = Principal + Simple interest
Simple interest = PRT/100
Where, R = Rate of interest
T = time taken
Calculation
Interest for 1 year = 8120 - 7656 = ₹464
So, the interest for 4 years = 4 × 464 = ₹1856
Now, the principal = 7656 - 1856 = ₹5800
Hence, Rate of interest = (464/5800) × 100 = 8% p.a.