Multiple choice

A sum of money becomes $\displaystyle\frac{41}{40}$ of itself in $\displaystyle\frac{1}{4}$ year at a certain rate of simple interest. The rate of interest $p.a.$ is:

  1. $\;10\%$
  2. $\;1\%$
  3. $\;2.5\%$
  4. $\;5\%$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Amount = P + SI = P(1 + RT/100). Given Amount = 41/40 P. So 1 + RT/100 = 41/40. RT/100 = 1/40. Given T = 1/4 year. R * (1/4) / 100 = 1/40 -> R/400 = 1/40 -> R = 10%.

AI explanation

Let the principal be P, so the interest earned is (41/40)P minus P, which equals P divided by 40, for a time period of 1/4 year. Using the Simple Interest formula, Rate equals (Interest x 100) divided by (Principal x Time). Substituting the values gives (1/40 x 100) divided by 1/4, which simplifies to 10% per annum.

Keep practicing — related questions