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. 10 %
• B. 15 %
• C. 5 %
• D. 25 %

Answer 1

The correct option is A 10 %

Given, time = 2 years.
The sum invested = ₹ 20,000.
Let the 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 S.I 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.