Question

Rakesh borrowed Rs 5000 from Ganesh at simple interest. If Ganesh received 500 more than his capital after 5 years, then the rate of interest per annum is:

• A. 2%
• B. 3%
• C. 4%
• D. 7%
• E. None of the above

Answer 1

The correct option is A 2%

Here, P =Rs 5000, I =Rs 500, T =5 years.
Therefore, using the formula
$R=\frac{100\times I}{P\times T}$
We have, rate of interest (R) $=\frac{100\times 500}{5000\times 5}=2$