Question

A certain sum of money amounts to ₹ 1008 in 2 years and to ₹ 1164 in 3.5 years under simple interest. Find the rate of interest.

• A. $13\%$
• B. $16\%$
• C. $18\%$
• D. $21\%$

Answer 1

The correct option is A

$13\%$

In 3.5 yrs the amount is ₹ 1164
In 2 yrs the amount is ₹ 1008 ---------------(i)

So, in 1.5 yrs interest generated is 1164 - 1008 = ₹ 156

Hence, by unitary method in 1 yr interest is $\frac{156}{1.5}=₹104$
Simple interest in 2 yrs $=₹104\times 2=₹208$ -------------------(ii)

Principal = Amount - Interest

From (i) and (ii) Principal (P) = ₹ 1008 - ₹ 208 = ₹ 800

Using I = $\frac{PRT}{100}$ and substituting P = 800 , T = 2 years , I = 208 we get

208 = $\frac{800\times R\times 2}{100}$

So , R = 13% per annum