At what rate of simple interest, a sum of ₹1,800 will become ₹2,700 in 10 years?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → 5%
Simple interest is the amount minus the principal, and \(\text{SI}=\displaystyle\frac{P\times R\times T}{100}\).
The interest earned in 10 years is the growth of the sum: \(2700-1800=900\)
Putting the values in the formula: \(900=\displaystyle\frac{1800\times R\times10}{100}=180R\)
Rate \(R=5\%\) a year