Question

    If Rs. 12,500 is invested at simple interest for 2.5

    years and the total amount becomes Rs. 15,625, what is the rate of interest per annum?
    A 25 Correct Answer Incorrect Answer
    B 15 Correct Answer Incorrect Answer
    C 10 Correct Answer Incorrect Answer
    D 21 Correct Answer Incorrect Answer

    Solution

    ATQ,

    Interest earned = 15,625 - 12,500 = Rs. 3,125

    Simple interest = (Principal × Rate × Time) ÷ 100

    So, 3,125 = (12,500 × r × 2.5) ÷ 100

    Or, 3,125 = 312.5 × r

    Or, r = 3,125 ÷ 312.5 = 10

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