A sum lent out at simple interest amounts to Rs. 6076 in 1 year and 7504 in 4 years. The sum and the rate of interest per annum are respectively:
Answer & explanation
Correct answer: option 1
Simple interest remains same after every year;
⇒ 3 years simple interest ⇒ 7504 - 6076 = 1428.
⇒ 1 year simple interest = \(\frac{1428}{3}\) = 476
Therefore.
Principal ⇒ Amount (at the end of 1st year) - S.I. of 1 year
⇒ 6076 - 476 = Rs.5600
S.I. = \(\frac{P × R × T}{100}\)
⇒ 476 = \(\frac{5600 × R × 1}{100}\)
⇒ R = \(\frac{476 }{56}\) = 8.5%