Question

If the simple interest earned on a sum of ₹20,000 from a bank in a period of 2 years is ₹4,000. Find the rate of interest.

• A. 5%
• B. 25%
• C. 15%
• D. 10%

Answer 1

The correct option is D 10%

Given, time = 2 years.
The sum invested = ₹20,000.
Let the rate of interest charged be R% p.a.

The simple Interest earned on a sum of ₹P for a period of T years at the rate of R% p.a is given by $\frac{P\times R\times T}{100}$.

So, 4,000 = $\frac{20,000\times R\times 2}{100}$

Hence, the rate of interest = 10% p.a.