Multiple choice

A sum of money amounts to Rs. 2480 in two years and Rs. 3200 in five years. Find the rate of simple interest per annum (%).

  1. 14

  2. 12

  3. 15

  4. 18

  5. 9
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B Correct answer
Explanation

Interest for 3 years (5-2) = 3200 - 2480 = 720. Interest for 1 year = 240. Interest for 2 years = 480. Principal = 2480 - 480 = 2000. Rate = (Interest * 100) / (Principal * Time) = (240 * 100) / (2000 * 1) = 12%.

AI explanation

The simple interest for the three-year period between year two and year five is the difference between the amounts, which is 3200 minus 2480, equaling 720. This means the simple interest for one year is 720 divided by 3, or 240, making the original principal 2480 minus 480, which is 2000. Using the simple interest formula, the rate is 240 divided by 2000, multiplied by 100, resulting in a 12 percent annual rate.

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