Question

When sum of Rs. 2600 is invested at rate of interest m% per annum for 4 years. The simple interest earned is Rs. 520. Find the rate of interest m%.
1. 8%
2. 2%
3. 5%
4. 10%

Answer 1

Correct Answer - Option 3 : 5%

Given:

Principal = Rs. 2600

Rate of interest = m%

Time = 4 years

Simple interest = Rs. 520

Formula:

Simple interest = PRT/100

Here, P is Principal, R is rate of interest and T is time in years

Calculation:

Simple interest = (2600 × m × 4)/100

520 = (2600 × m × 4)/100

⇒ m = 5%

∴ Rate of interest is 5% per annum.