Multiple choice

The simple interest accrued on a sum of Rs 24,000 in two years is one eighth of the sum. What is rate of simple interest per annum?

  1. 5%

  2. 4.5%

  3. 6.25%

  4. 7.25%

  5. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Simple Interest = Principal × Rate × Time. Given SI = (1/8) × 24000 = 3000 over 2 years. So 3000 = 24000 × R × 2, which gives R = 3000/(24000×2) = 6.25%. The key is recognizing that the simple interest is one-eighth of the principal, not the amount.

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