An amount of Rs 50,000 becomes Rs 72,000 in 4 years on a simple rate of interest. The rate of interest is _____ per annum.
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. 11%.
Given,
Amount = 72000
Principal (R) = 50000
Simple interest = 72000 - 50000 = 22000
Time (T) = 4 years
We know,
Simple interest = PRT/100
Let the rate of interest be R.
⇒ 22000 = (50000 × R × 4)/100
⇒ 220 = 20 × R
⇒ R = 11%