A sum of money lent at simple interest amounts to Rs. 9,920 after 2 years and to Rs. 12,800 after 5 years. Find the rate of interest per annum.
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. 12%.
Let the Principal amount be p and the rate of Interest be r%
According to the question,
⇒ p + 2pr/100 = 9920 ----(1)
⇒ p + 5pr/100 = 12800 ----(2)
So, pr/100 = 960
Now,
⇒ p + 2pr/100 = 9920
⇒ p = 8000
⇒ pr/100 = 960
⇒ r = 12%
Rate of interest = 12%