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      Question

      If Rs. 10,000 is invested at a simple interest rate of

      8% per annum, it accrues Rs. 1,200 as interest over a period of 't' years. Given the same duration 't', what annual simple interest rate is required for an investment of Rs. 16,000 to generate Rs. 2,400 in interest?
      A 6% Correct Answer Incorrect Answer
      B 5% Correct Answer Incorrect Answer
      C 8% Correct Answer Incorrect Answer
      D 10% Correct Answer Incorrect Answer

      Solution

      Simple interest = (principal X rate X time) ÷ 100
      ATQ;
      1,200 = (10,000 X 8 X t) ÷ 100
      Or, 't' = (1,200/800)
      Or, 't' = 1.5
      Let the required rate of interest be 'R%' p.a.
      So, 2,400 = 16,000 X 1.5 X R ÷ 100
      Or, 240R = 2,400
      Or, 'R' = 10
      Therefore, required rate of interest = 10% p.a.

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