Question

If the interest charged for 8 months is 0.06 times 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 Rs 100 i.e. P = Rs 100

Interest (I) charged = 0.06 $\times$ Rs 100

= Rs 6 and

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

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

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

$=$ $\frac{(6\times 100)}{(100\times 2/3)}$

= 9 %

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