Multiple choice

If any amount with simple interest becomes Rs. 1260 in 2 years and Rs. 1350 in 5 years, find the yearly rate of interest.

  1. 2.5%

  2. 3.75%

  3. 5%

  4. 7.5%
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A Correct answer
Explanation

Interest for 3 years (5-2) = 1350 - 1260 = 90. Interest for 1 year = 30. Principal = 1260 - 2*30 = 1200. Rate = (30/1200) * 100 = 2.5%.

AI explanation

The difference between the amounts for 5 years and 2 years, which is 1350 minus 1260, equals 90; this represents the simple interest for 3 years. The yearly interest is 30, and subtracting 2 years of interest (60) from the 2-year amount gives the principal of 1200. The rate is calculated as 30 divided by 1200 multiplied by 100, which is 2.5%. The result is 2.5%.

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