Question

If the interest charged for 8 months is 0.06 times of the money borrowed, then what is the rate of interest per year?

• A. 9.5%
• B. 8.5%
• C. 10.25%
• D. 9%

Answer 1

The correct option is D

9%

Let the money borrowed be P

Interest (I) charged = 0.06 $\times$ P

=0.06 P

T = $\frac{8}{12}$ years

=$\frac{2}{3}$ years

Rate of interest (R) = $\frac{(I\times 100)}{(P\times T)}$

= $\frac{(0.06P\times 100\times 3)}{(P\times 2)}$

= 9 %

Hence, the rate of interest per year is 9%.