The simple interest on a sum is 7/13 of the principal for 21 years. What is the rate (in percentage) of interest per annum? (Rounded to two decimal places)
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e 2.56.
Simple Interest = (Principal × Rate × Time) ÷ 100
(7/13) × Principal = (Principal × Rate × 21) ÷ 100
⇒ 7/13 = (Rate × 21) ÷ 100
⇒ (7 × 100) ÷ 13 = Rate × 21
⇒ 700 ÷ 13 = Rate × 21
⇒ 700 ÷ 13 ≈ 53.85
⇒ 53.85 ÷ 21 ≈ 2.56