Correct Answer - Option 1 :
\(6\frac{1}{4}\)% p.a.
Given:
An amount becomes Rs. 10,000 in 4 years
The same amount becomes Rs. 11,000 in 6 years
Formula Used:
Simple interest = (Principal × Time × Rate of interest)/100
Simple interest = Amount - Principal
Calculation:
The difference in the amount in 2 years (6 - 4) = Simple interest in 2 years
⇒ Rs. 11,000 - Rs. 10,000 = Rs. 1,000
So, simple interest for 1 year = 1000/2 = Rs. 500
⇒ Simple interest for 4 years = 500 × 4 = Rs. 2000
Principal = Amount - Simple interest
⇒ Principal = Rs. 10,000 - Rs. 2,000 = Rs. 8,000
Rate of interest = (simple interest0 × 10)/(Principal × Time)
⇒ Rate of interest = (500 × 100)/(8000 × 1)
∴ Rate of interest = \(6\frac{1}{4}\)% p.a.
The correct option is 1 i.e. \(6\frac{1}{4}\)% p.a.