Amarnath invested a sum of ₹ 22500. At what rate of simple interest per annum will he obtain a total amount of ₹ 28800 at the end of 4 years?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. 7%
Given:
Amarnath invested a sum of ₹ 22500
After 4 years he obtained a total amount of ₹ 28800
Formula used:
Simple interest = PRT/100 ----- (1)
Where, P = principle. R = rate and T = time
Calculations:
Simple interest for 4 years = 28800 - 22500 = 6300
Using equation (1), we get
⇒ 6300 = (22500 × 4 × R)/100
⇒ 6300 = 225 × 4 × R
⇒ R = 6300/900 = 7%