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      Question

      The simple interest accrued in five years on a principal

      of Rs. 50,000 is one – tenth of the principal. What is the rate of simple interest p.a.?
      A 1% Correct Answer Incorrect Answer
      B 1.5% Correct Answer Incorrect Answer
      C 4% Correct Answer Incorrect Answer
      D 2% Correct Answer Incorrect Answer
      E none of these Correct Answer Incorrect Answer

      Solution

      Principal = Rs. 50,000 Simple interest accrued in 5 years = One-tenth of principal So, Simple Interest = 50,000 × (1/10) = Rs. 5,000 We know, Simple Interest = (Principal × Rate × Time)/100 So, 5,000 = (50,000 × Rate × 5)/100 Or, 5,000 = 2,500 × Rate So, Rate = 5,000 ÷ 2,500 = 2% Therefore, the rate of simple interest = 2% p.a.

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