Question

A man invests ₹ 5000 at a certain rate of interest, compounded annually. At the end of one year, it amounts to ₹ 5600. Find the rate of interest per annum.

• A. 10%
• B. 12%
• C. 15%
• D. 22%

Answer 1

The correct option is B 12%

Since the tenure is 1 year, the compound interest will be the same as the simple interest.

Amount = Principal + Interest
Interest = ₹ (5600 - 5000) = ₹ 600

$\text{Simple Interest =}\frac{PRT}{100}$

$₹600=\frac{₹5000\times R\times 1}{100}$

$R=\frac{100\times 600}{5000\times 1}=12\%$