Question

What rate gives $₹280$ as interest on a sum of $₹56,000$ in $2$ years?

Answer 1

Step 1. Given information.

$$\begin{gathered} \mathrm{Simple}\mathrm{interest}=₹280 \\ \mathrm{Principal}\left(P\right)=₹56,000 \\ \mathrm{Time}\left(t\right)=2\mathrm{years} \end{gathered}$$

Step 2. Calculate the rate of interest$\left(r\right)$.

As we know,

$$\begin{gathered} \mathrm{Simple}\mathrm{interest}=\frac{P\times r\times t}{100} \\ \Rightarrow r=\mathrm{Simple}\mathrm{interest}\times \frac{100}{P\times t} \\ \Rightarrow r=280\times \frac{100}{56,000\times 2} \\ \Rightarrow r=\frac{100}{400} \\ \Rightarrow r=\frac{1}{4} \\ \Rightarrow r=0.25 \end{gathered}$$

Hence, the rate of interest is $0.25\%$