Multiple choice

If a certain sum of money amounts Rs.18000 in 5 years and Rs.18800 in 7 years at a certain rate of interest. Find the rate of interest.

  1. 2.5%

  2. 4.8%

  3. 5.10%

  4. 6.15%
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

In simple interest, interest earned each year is constant. Interest earned in 2 years (from year 5 to 7) = 18800 - 18000 = 800, so annual interest = 400. This interest is on the principal for 1 year at rate r: 400 = 18000 × r/100. Therefore r = 400/180 = 2.22%, which rounds to 2.5%. Option A is closest.

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