Multiple choice

A sum of Rs. 12,500 amounts to Rs. 15,500 in 4 years at a certain rate of simple interest. Calculate the rate of interest charged.

  1. 3%

  2. 4%

  3. 5%

  4. 6%

  5. 8%
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D Correct answer
Explanation

Simple interest = Amount - Principal = 15500 - 12500 = 3000. Using the formula SI = (P * R * T) / 100, we get 3000 = (12500 * R * 4) / 100. Solving for R: 3000 = 500 * R, so R = 6%.

AI explanation

Using the simple interest formula, the interest earned is 15500 minus 12500, which equals 3000. The rate is calculated as 100 multiplied by the interest, divided by the product of the principal and time, giving 100 multiplied by 3000 divided by the product of 12500 and 4. This simplifies to 300000 divided by 50000, resulting in a rate of 6 percent.

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