The simple interest on a sum of money is 1/16th of the principal, and the number of years is equal to rate per annum. Find the rate percentage.
- AOption (a)
10%
- BOption (b)
15%
- COption (c)
5%
- DOption (d)
2.5%
- EOption (e)
6%
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Correct answer
2.5%
Why this answer is correct
Shortcut Trick
When Simple Interest is a fraction (1/n) of Principal and Time (T) equals Rate (R).
Formula: Rate (R) = √(Fraction × 100)
R = √(1/16 × 100) = √(100/16)
R = 10/4 = 2.5%
∴ The correct answer is 2.5%.
Alternate Method
Given:
Simple Interest (SI) = 1/16 × Principal (P)
Number of years (T) = Rate per annum (R)
Formula Used:
SI = (P × R × T) ÷ 100
Calculations:
⇒ P/16 = (P × R × R) ÷ 100
⇒ 1/16 = R2 ÷ 100
⇒ R2 = 100 ÷ 16
⇒ R = √(100/16)
⇒ R = 10/4
⇒ R = 2.5%
∴ The correct answer is 2.5%.
Additional Information
Simple Interest Formula
The basic formula is SI = (P × R × T) / 100, where P is Principal, R is Rate, and T is Time.
Case when R = T
If numerical values of Rate and Time are equal, then R = T = 10 × √(SI/P).
Amount Calculation
Total Amount (A) is the sum of Principal and Simple Interest: A = P + SI.
