Question

Rahul invested in a saving scheme in which he gets a return of Rs. 600 in 4 years and Rs. 650 in 6 years. If the saving schemes calculates the return at simple interest then what is the rate of interest per annum?
1. 3%
2. 5%
3. 7%
4. 9%

Answer 1

Correct Answer - Option 2 : 5%

Given:

Return is Rs. 600 for 4 years and Rs. 650 for 6 years

Formula used:

Simple interest(SI) = (P × R × T)/100 

P = Principal

R = rate of interest

T = time period

Calculation:

According to the question:

[P + (P × R × 4)/100]/[P + (P × R × 6)/100] = 600/650

⇒ [1 + (4R/100)]/[1 + (6R/100)] = 12/13

⇒ (100 + 4R)/(100 + 6R) = 12/13

⇒ 20R = 100

⇒ R = 5

∴ Rate of interest per annum is 5%