Multiple choice

A person invested Rs. 12,000 on simple interest for 7 years to obtain a total amount of Rs. 20,400 on a certain annual rate of interest. What was the rate of interest to obtain the above amount?

  1. 10%

  2. 8%

  3. 9%

  4. 7%
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A Correct answer
Explanation

Interest = 20400 - 12000 = 8400. Simple interest formula: 8400 = (12000 * R * 7) / 100. 8400 = 840 * R, so R = 10%.

AI explanation

The simple interest formula is SI = (P multiplied by R multiplied by T) divided by 100. The interest earned is 20400 minus 12000, which equals 8400. Substituting the values gives 8400 = (12000 multiplied by R multiplied by 7) divided by 100, which simplifies to 8400 = 840R. Solving for R gives a rate of 10%.

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