Question

Simple interest in a certain sum for 8 years is (1/50) the of the sum find the rate of interest.
1. 0.20%
2. 0.10%
3. 0.35%
4. 0.25%

Answer 1

Correct Answer - Option 4 : 0.25%

Given

Time = 8 years

Simple interest = (1/50) principal

Formula used

Simple interest = (p × r × t)/100

Calculation

(1/50)P = (P × r × 8)/100

⇒ 100/50 = 8r

⇒ 2 = 8r

⇒ 2/8 = r

⇒ 1/4 = r

⇒ 0.25% = r

∴ Rate of interest is 0.25%