Question

A man borrowed a certain sum of money from a money lender at a certain rate of simple interest for some years. If the simple interest on a sum of money is 1/16 of the sum and the number of years is numerically equal to the rate percent per annum, then find the rate of interest 
1. 3/2 %
2. 5/2 %
3. 5 %
4. 7 %

Answer 1

Correct Answer - Option 2 : 5/2 %

Given 

Rate of interest = time 

Formula Used 

Simple Interest = principal × time × Rate/100

Calculation 

Let the rate of interest and time be x 

⇒ Simple interest = (1/16) × principal

⇒ 1 = (16 × x × x)/100

⇒ x² = 25/4 

⇒ x = 5/2 

∴ Rate of Interest is (5/2)%