Multiple choice

A sum of money becomes 7/6 of itself in 3 years at a certain rate of simple interest. The rate per annum is?

  1. 50/9%

  2. 60/9%

  3. 18%

  4. 25%
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A Correct answer
Explanation

If the sum becomes 7/6 of itself, the interest is 1/6 of the principal. Using Simple Interest = (P * R * T) / 100, we have (1/6)P = (P * R * 3) / 100. Solving for R gives 100/18 = 50/9 percent.

AI explanation

Let the principal be P, meaning the total amount after 3 years is 7P/6, making the simple interest P/6. Using the formula SI = (P * R * T) / 100, we substitute the known values to get P/6 = (P * R * 3) / 100. Canceling P and solving for R yields R = 100 / 18, which simplifies to a rate of 50/9%.

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