A sum of Rs 2000 will become Rs 2400 in 12 months at some rate of simple interest. Find the rate of interest per annum.
Answer & explanation
Correct answer: option 3
The formula for Simple Interest = $\frac{P \times R \times T}{100}$
let rate of interest per annum = r%
Simple Interest = Amount - Principal = 2400 - 2000 = 400
Thus, 400 = $\frac{2000 \times r \times 1}{100}$
⇒ 2000r = 400 x 100
⇒ r = 40
Thus, the rate of interest per annum is 40%