Multiple choice

At a certain rate of simple interest, a sum of money becomes Rs. 13,000 at the end of 3 years and Rs. 16,000 at the end of seven years. Find the rate of interest.

  1. 6.98%

  2. 7.11%

  3. 7.36%

  4. 8.56%

  5. None of the above
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A Correct answer
Explanation

Interest for 4 years (7-3) = 16000 - 13000 = 3000. Interest per year = 750. Interest for 3 years = 2250. Principal = 13000 - 2250 = 10750. Rate = (750 / 10750) * 100 = 6.976%.

AI explanation

The sum earns an interest of Rs. 16,000 - Rs. 13,000 = Rs. 3,000 over a period of 7 - 3 = 4 years. Using the simple interest formula, the annual interest is Rs. 3,000 / 4 = Rs. 750. The principal is found by subtracting three years of interest from the amount at three years: Rs. 13,000 - (3 * 750) = Rs. 10,750. The rate of interest is therefore (Rs. 750 / Rs. 10,750) * 100 = 6.98%.

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