A certain sum of money amounts to $\frac{3}{2}$ of itself in 2 years applying simple interest. Find the rate of simple interest per annum .
Answer & explanation
Correct answer: option 1
Given :-
A certain sum of money amounts to \(\frac{3 }{2 }\) of itself.
Let Principal = 2 , Then Amount = 3
We know ,
Amount = Principal + Interest
3 = 2 + Interest
Interest = 3 - 2 = 1
We know,
Simple Interest = \(\frac{Principal ×Rate × Time }{100}\)
1 = \(\frac{2×Rate × 2}{100}\)
Rate = 25%