A sum of ₹40,000 is borrowed for 4 years at a certain rate of interest. If the total interest paid at the end of 4 years is ₹24,000, what is the rate of interest?
Show answer & explanation
Correct answer: C
Explanation
Given:
Principal = 40,000
Time = 4 years
Simple Interest = 24,000
Formula:
SI = (P × R × T) / 100
24,000 = (40,000 × R × 4) / 100
24,000 = 160,000R / 100
24,000 = 1600R
R = 24,000 / 1600 = 15%