Multiple choice

Simple interest on a certain sum at a certain annual rate of interest is 16% of the sum. If the numbers representing rate percent and time in years are equal, then the rate of interest is

  1. 4%

  2. 6%

  3. 4.5%

  4. 6.5%

  5. None of these
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A Correct answer
Explanation

Simple interest is given by SI = (P * R * T) / 100. We are told SI = 0.16 * P and R = T. Substituting these, 0.16 * P = (P * R * R) / 100, which simplifies to R^2 = 16, so R = 4.

AI explanation

The simple interest is 16% of the sum, meaning I/P = 0.16. Using the formula R = (I x 100)/(P x T) and substituting T with R since they are equal, we get R = (0.16 x 100)/R. Multiplying both sides by R gives R^2 = 16, so the rate of interest is 4%.

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