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      Question

      An investment of Rs. 20,000 at simple interest amounts to

      Rs. 25,500 in 5 years. Find the annual rate of interest.
      A 18.5 Correct Answer Incorrect Answer
      B 5.5 Correct Answer Incorrect Answer
      C 7.6 Correct Answer Incorrect Answer
      D 10.5 Correct Answer Incorrect Answer

      Solution

      ATQ,

      Interest earned = 25,500 - 20,000 = Rs. 5,500

      Simple interest = Principal × rate × time ÷ 100

      So, 5,500 = 20,000 × rate × 5 ÷ 100

      Or, 5,500 = 1,000 × rate

      Or, rate = 5.5

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