Question

If the simple interest on a certain sum of money is 1/4 of the sum and the rate percent equals the number of years. Calculate the rate of interest ?
1. 4%
2. 6%
3. 5%
4. 7%

Answer 1

Correct Answer - Option 3 : 5%

Given∶

S.I. = 1/4 of Principal

Rate = Number of years

Formula Used∶

Rate = S.I. × 100/P × T

Calculation∶

Let the Principal be Rs. x

Then, S.I. = (1/4)x

Also, Rate of interest = time = r

By using, Rate = S.I. × 100/ P× T

⇒ r = (1/4)x × 100/x × r

⇒ r² = 25

⇒ r = 5

∴ The rate of interest is of 5%.