Question

The simple interest on a certain sum of money at the rate of 5% per annum for 9 years is ₹1,260. At what rate of interest can the same amount of interest be received on the same sum after 6 years?

• A. 8.0%
• B. 7.5%
• C. 8.5%
• D. 6.5%

Answer 1

Answer:

B. 7.5%

Use the Simple Interest formula:

$\text{SI} = \frac{P \times R \times T}{100}$

Find the principal (P)

Given:

• SI = 1260

• R = 5%

• T = 9 years

$1260 = \frac{P \times 5 \times 9}{100}$

$1260 = \frac{45P}{100}$

$P = \frac{1260 \times 100}{45} = 2800$

Find new rate for same SI in 6 years

Now:

• SI = 1260

• P = 2800

• T = 6 years

$1260 = \frac{2800 \times R \times 6}{100}$

$1260 = \frac{16800R}{100}$

1260 = 168R
$R = \frac{1260}{168} = 7.5\%$
7.5% per annum