Question
An investment of Rs. 20,000 at simple interest amounts to
Rs. 25,500 in 5 years. Find the annual rate of interest.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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