Multiple choice

A sum of money amounts to Rs. 12,570 after 6 years and to Rs. 15,725 after 9 years at the same rate of simple interest. The approximate rate of interest per annum is

  1. 16.8%

  2. 15.8%

  3. 17.8%

  4. 19.8%

  5. 22.8%
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A Correct answer
Explanation

Interest for 3 years (9-6) is 15725 - 12570 = 3155. Simple interest per year is 3155/3 = 1051.67. Principal = 12570 - (6 * 1051.67) = 12570 - 6310 = 6260. Rate = (1051.67 / 6260) * 100 = 16.799%.

AI explanation

The simple interest for the 3 years between year 6 and year 9 is the difference in amounts: 15725 - 12570 = 3155. This means the simple interest for one year is 3155 / 3 = 1051.67, making the simple interest for the first 6 years equal to 6310. The principal is found by subtracting this interest from the 6-year amount: 12570 - 6310 = 6260. The rate of interest is therefore (1051.67 / 6260) * 100, which is approximately 16.8%.

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