₹480 is invested at simple interest. It becomes ₹520 after 20 months. What is the interest rate per annum?
Answer & explanation
Correct answer: option 2
20 months = 1 years 6 months = \(\frac{3 }{2}\) years
Simple interest of \(\frac{3}{2}\) years = 520 - 480 = 40
Simple interest of 1 years = \(\frac{3}{5 }\) × 40 = 24
Simple Interest = \(\frac{Principal ×Rate × Time }{100}\)
24 = \(\frac{480 ×Rate × 1 }{100}\)
Rate = 5%