Multiple choice

Choose the correct answer from the alternatives given. The simple interest on a sum of money is $\frac{1}{16}$ of the sum. If the number of years is numerically equal to the rate percent per annum, then the rate percent per annum is

  1. 3 $\frac{1}{3}$
  2. 6 $\frac{2}{3}$
  3. 2 $\frac{1}{2}$
  4. 7 $\frac{1}{2}$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Simple interest SI = (P * R * T) / 100. Given SI = P/16 and R = T, we have P/16 = (P * R^2) / 100. Thus, R^2 = 100 / 16 = 6.25. R = sqrt(6.25) = 2.5.

AI explanation

The simple interest formula is I = (P * R * T) / 100, and the problem states I = P / 16. Since the time in years is numerically equal to the rate, we can substitute R for T to get P / 16 = (P * R^2) / 100. Canceling P from both sides gives 100 / 16 = R^2, so R^2 = 6.25. Taking the square root of both sides gives a rate of 2.5 percent.

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