If the total simple interest received on a sum for 25 years is $\frac{5}{8}$ of the principal, what is the rate of simple interest paid per annum?
Answer & explanation
Correct answer: option 1
Simple Interest is \(\frac{5}{8}\) of principal.
Let Principal = 8 & Simple interest = 5
We know ,
Simple Interest = \(\frac{Principal ×Rate × Time }{100}\)
5 = \(\frac{8×Rate × 25 }{100}\)
Rate = \(\frac{5 }{2}\)%
= 2.5%