Multiple choice

Rohan invested Rs. 2,00,000 in a fixed deposit scheme. After 4 years, he received a total amount of Rs. 2,40,000. What was the annual simple interest rate offered by the bank?

  1. 4.5%

  2. 5%

  3. 5.5%

  4. 6%

  5. 6.5%
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Simple Interest = Amount - Principal = 240000 - 200000 = 40000. SI = (P * R * T) / 100. 40000 = (200000 * R * 4) / 100. 40000 = 8000 * R. R = 5 percent.

AI explanation

Using the simple interest formula R = (SI * 100) / (P * T), we first find the interest earned by subtracting the principal from the total amount, which is 240000 - 200000 = Rs. 40,000. The rate is then calculated as (40000 * 100) / (200000 * 4), equaling 4000000 / 800000. This simplifies to an annual interest rate of 5%.

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