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Question : A certain sum of money amounts to $\frac{3}{2}$ of itself in 2 years applying simple interest. Find the rate of simple interest per annum.

Option 1: 25%

Option 2: 15%

Option 3: 16%

Option 4: 26%


Team Careers360 2nd Jan, 2024
Answer (1)
Team Careers360 17th Jan, 2024

Correct Answer: 25%


Solution : Given,
A certain sum of money amounts to $\frac32$ of itself in 2 years by applying simple interest.
We know,
Present value = $P+\frac{P\times r\times t}{100}$, where $P$ is the principal, $r$ is the interest rate per annum and $t$ is the time in years.
Let the rate of the simple interest per annum be $r$ and the sum of money be $P$.
Then, after 2 years,
⇒ $\frac{3}{2}P=P+\frac{P\times r\times2}{100}$
⇒ $1.5=1+\frac{r}{50}$
⇒ $r=(1.5−1)×50$
⇒ $r=25$%
Hence, the correct answer is 25%.

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