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    Question

    A principal amount of Rs. 2,000 earns a simple interest of

    Rs. 375 in 2 years and 6 months. What is the annual rate of interest?
    A 7.5% Correct Answer Incorrect Answer
    B 12% Correct Answer Incorrect Answer
    C 6.5% Correct Answer Incorrect Answer
    D 18% Correct Answer Incorrect Answer

    Solution

    ATQ,

    Let the rate of interest = ‘r%’ p.a.

    2 years and 6 months = 2 × 12 + 6 = 30 months

    We have,

    [2000 × r × (30/12)] ÷ 100 = 375

    ⇒ 50r = 375

    ⇒ r = 375 ÷ 50 = 7.5

    So, rate of interest = 7.5%

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