Question

If a sum of $\$300$ invested in a simple interest scheme for a period of $3$ years earns an interest of $\$18$, what is the percentage rate of interest?

• A. $4\%$
• B. $5\%$
• C. $2\%$
• D. $3\%$

Answer 1

The correct option is C $2\%$

Given,
Principal amount, $p=\$300$
Simple interest, $=\$18$
Time, $t=3$ years
We know that. simple interest
$=p\times r\times t,$ where $r$ is the annual interest rate(in decimal form).

$18=300\times r\times 3$
$r=\frac{18}{3\times 300}=0.02=\frac{2}{100}=2\%$
So, the rate of interest is $2\%.$