If the sum of money amounts to ₹2000 at the end of 2 years and ₹2500 at the end of 5 years at simple interest, what is the rate of interest?
Show answer & explanation
Correct answer: C
Explanation
Given:
Amount after 2 years = 2000
Amount after 5 years = 2500
Formula:
SI = (P × R × T) / 100
Interest for 3 years = 2500 − 2000 = 500
Interest for 1 year = 500 ÷ 3 = 166.67
Interest for 2 years = 2 × 166.67 = 333.33
Principal = 2000 − 333.33 = 1666.67
R = (SI × 100) / (P × T)
R = (166.67 × 100) / 1666.67 = 10%
Interest rate = 10%