Ram invested a certain sum of money at simple interest. It amounted to of itself in 3 years. ‘What will be its rate per cent per annum?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is Option 2 i.e. 8.33%.
We know that,
S.I. = (P × R × T)/100
here, S.I. = Simple Interest, P = Pribcipal, R = Rate, and T = Time
and, Amount(A) = P + S.I.
⇒ A = 5/4 × P
Now,
⇒ A = P + S.I.
⇒ 5/4 × P = P + S.I.
⇒ S.I. = 5P/4 - P
⇒ S.I. = P/4
Now,
⇒ S.I. = (P × R × T)/100
⇒ P/4 = (P × R × 3)/100
⇒ 1/4 = 3R/100
⇒ R = 100/12
⇒ R = 8.33%
Thus, The rate of interest is 8.33% per annum