The amount obtained by investing a certain sum at r% p.a. for 3 years at simple interest is equal to the simple interest on the same sum at the same rate for 19 years. What is the value of r?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. 6.25.
Formula used:
Simple interest = PRT/100
Amount = P + Simple interest
Where, P = principal, R = rate and T = time period
Calculations:
According to the question,
Amount obtained by investing a certain sum at r% p.a. for 3 years = simple interest is equal to the simple interest on the same sum at the same rate for 19 years
⇒ P + 3PR/100 = 19PR/100
⇒ P = 16PR/100
⇒ R = 100/16 = 6.25%