At a specific rate of simple interest, a sum of money becomes ₹18,500 after four years and ₹19,800 after six. Calculate the simple interest rate at 12% annually for five years on the same amount.
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Correct answer: C
Explanation
Given:
Amount after 4 years = 18,500
Amount after 6 years = 19,800
Formula:
Interest for 2 years at simple interest = Difference of amounts
SI = (P × R × T) / 100
Interest for 2 years = 19,800 − 18,500 = 1300
Interest for 1 year = 1300 / 2 = 650
Interest for 4 years = 650 × 4 = 2600
Principal = 18,500 − 2600 = 15,900
Now, simple interest for 5 years at 12% rate
SI = (15,900 × 12 × 5) / 100 = 9,540
Simple interest = ₹9,540