Multiple choice

A sum of money lent out of simple interest amounts to Rs. 890 after 2 years and to Rs. 1,420 after a further period of 5 years. Find the rate %.

  1. 12 %

  2. 18 %

  3. 15.63 %

  4. 16.67 %
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Let P be principal and R be rate. Amount after 2 years = P + 2P*R/100 = 890. Amount after 7 more years (total 9) = P + 7P*R/100 = 1420. Solving: 5P*R/100 = 530, so P*R/100 = 106. Then P + 2*106 = 890, so P = 678. Thus R = 106*100/678 = 15.63%.

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