The simple interest received on a sum is 25/36 of the sum. The number of years is equal to the annual rate of interest. What is the annual rate of interest?
Answer & explanation
Correct answer: option 4
Let Principal (P) = Rs 100
Interest(I) = \(\frac{25}{36}\) × 100 = \(\frac{2500}{36}\)
ATQ
Rate = Time = a
⇒ Total Interest = Rate × Time
⇒ \(\frac{2500}{36}\) = a × a
⇒ \(\frac{2500}{36}\) = a2
∴ a = \(\frac{50}{6}\) =8.33 %