A sum of money lent at simple interest amounts to ₹ 9,920 after 2 years and to ₹ 12,800 after 5 years. Find the rate of interest per annum.
Answer & explanation
Correct answer: option 2
Simple interest of 3 years = 12800 - 9920 = 2880
Simple interest of 1 year = \(\frac{2880 }{3}\) = 960
Simple interest of 2 year = 960 × 2 = 1920
Amount = Principal + Simple interest
9920 = Principal + 1920
Principal = 9920 - 1920 = 8000
We know ,
Simple Interest = \(\frac{Principal ×Rate × Time }{100}\)
960 = \(\frac{8000 ×Rate × 1}{100}\)
Rate = 12%