Amar borrowed Rs. 10000 from Sachin at simple interest. After 4 years, Sachin received Rs. 5000 more than the amount given to Amar on loan. Find the rate of interest.
- AOption (a)
12.5%
- BOption (b)
25%
- COption (c)
20%
- DOption (d)
4%
- EOption (e)
None of these
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Correct answer
12.5%
Why this answer is correct
Given:
The amount borrowed by Amar = Rs. 10000
Time = 4 years
The extra amount received by Sachin = Rs. 5000
Concept used:
The extra amount Sachin gets is the interest.
Simple Interest = Principal × rate × time/100
Calculation:
Simple Interest = Rs 5000
⇒ 5000 = 10000 × rate × 4/100
⇒ Rate = 50/4
∴ Rate % = 12.5%