A sum of money amounts to ₹7,500 in 5 years, and to ₹8,500 in 7 years at simple interest at the same rate of interest. The rate of interest per annum is :
Answer & explanation
Correct answer: option 4
Simple interest of 2 years = 8500 - 7500 = 1000
Simple Interest of 1 year = 500
Simple interest of 5 years = 5 × 500 = 2500
Amount = Principal + Interest
7500 = Principal + 2500
Principal = 5000
Simple Interest = \(\frac{Principal ×Rate × Time }{100}\)
500 = \(\frac{5000×Rate × 1 }{100}\)
Rate = 10%