A sum of money deposited in a bank at a simple interest per annum becomes ₹5200 in 5 years and ₹5680 in 7 years. Find the rate of interest per annum.
- AOption (a)
6.5%
- BOption (b)
6%
- COption (c)
5%
- DOption (d)
5.5%
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Correct answer
6%
Why this answer is correct
Formula used:
Simple interest(SI) = \(\dfrac{P × R × T}{100}\)
R = (S.I × 100)/T × P
Where,
P = Principal
R = Rate
T = Time
Calculation:
According to question,
P + S.I. for 5 years = 5200 ....(i)
P + SI for 7 years = 5680 ....(ii)
On subtracting equation (i) from (ii),
SI for 2 years = 480
SI for 1 year = ₹ 240
From equation (i),
⇒ P + 5 × 240 = ₹5200
⇒ P = 5200 – 1200 = ₹ 4000
Now,
R = (S.I × 100)/T × P
R = (240 × 100)/(1 × 4000) = 6%
∴ The rate of interest per annum is 6%.