The amount payable on maturity of a certain sum which is

Solution

Simple Interest, SI = (P × R × T) / 100 For the 10-year investment plan, Rs. 9800 would be considered as the principal amount. Since the interest being calculated is simple interest, the interest incurred in 5 years-   = (12600 - 9800) =Rs. 2800 Hence, interest incurred every year = 2800 / 5 = Rs. 560 Now considering the 5-year investment plan, the principal amount = (9800 - 2800) = Rs. 7000 Let the rate of interest be R%. ⇒ R = (560 × 100) /7000 ⇒ R = 8% ∴ The rate of interest is 8% p.a.