A sum of Rs. 2000 will become Rs. 2400 in 12 months at some rate of simple interest. Find the rate of interest per annum.
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. 20%.
Given that
Principal (P) = Rs. 2000
Amount = Rs. 2400
Time (T) = 12 months = 1 year
Formula used
Amount = Principal + Interest
Simple interest = PRT/100
Calculation
2400 = 2000 + Interest
Interest = 2400 - 2000 = Rs. 400
Now, 400 = 2000 × R × 1/100
Rate (R) = 20%