Question

A sum of Rs. 22,400 amounts to Rs. 24,250 in 6 years at the rate of simple interest. What is the rate of interest (correct to two decimal places)?

• A. 1.02%
• B. 1.56%
• C. 1.65%
• D. 1.38%

Answer 1

Answer:

D. 1.38%

Solution:

Given:

Principal = Rs. 22,400

Time period = 6 years

Total amount (including interest) = Rs. 24,250

Formula:

S.I. $= P\times{\frac{R}{100}}\times{T}$

Where, P = Principal, R = Rate of interest, and T = Time period (in years)

Calculation:

S.I. = Total amount - Principal 

⇒ 24,250 - 22,400 = Rs. 1850

According to the question,

⇒ $1850 = 22,400\times{\frac{R}{100}}\times{6}$

⇒ $1850 = 224\times{R}\times{6}$

⇒ $925 = 224\times{R}\times{3}$

⇒ $R =\frac{925}{(224\times{3})}$

⇒ $R =\frac{925}{672}$ = 1.376 ≈ 1.38

∴ The rate of interest is 1.38%.