A sum of Rs. 11500 amounts to Rs.12880 in 2 years at the rate of simple interest. What is the rate of interest?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. 6% per annum.
Given:
A sum of Rs. 11500 amounts to Rs.12880 in 2 years
Formula used:
SI = PRT/100
Where, SI = Simple interest, P = principal, R = rate and T = time period
Calculations:
⇒ SI = Amount - Principal
⇒ SI = 12880 - 11500 = 1380
According to the question;
⇒ 1380 = (11500 × 2 × R)/100
⇒ R = 6%