Multiple choice

If I get Rs. 50 by investing Rs. 5,000 for a year, what is the rate of interest?

  1. 1%

  2. 5%

  3. 2%

  4. 10%
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A Correct answer
Explanation

Simple interest formula is I = (P * R * T) / 100. Here, 50 = (5000 * R * 1) / 100. Solving for R gives R = 5000 / 5000 = 1%.

AI explanation

Using the simple interest formula Rate = (Interest times 100) divided by (Principal times Time), substitute the given values. The rate equals (50 times 100) divided by (5000 times 1). Solving this gives 5000 divided by 5000, resulting in an interest rate of 1%.

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