A sum of ₹1,456, when invested for ten years, amounts to ₹2,366 on maturity. Find the rate of simple interest per annum that was to be paid on the sum invested.
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. 6.25%.
Simple Interest = (P × R × T)/100
Where, P = Principal; R = Rate of interest per annum; T = Total time
Principal amount (P) = ₹1,456
Amount on maturity = ₹2,366
Total simple interest = 2366 - 1456 = ₹910
Time (T) = 10 years
Let the rate of interest per annum is R%.
So, 910 = (1456 × R × 10)/100
⇒ 1456R = 9100
⇒ R = 9100/1456 = 6.25
Therefore, the rate of simple interest per annum is 6.25%.