Question : A sum of INR 12,000 amounts to INR 15,000 in 5 years at the rate of simple interest. What is the rate of interest per annum?
Option 1: 8%
Option 2: 7%
Option 3: 6%
Option 4: 5%
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Correct Answer: 5%
Solution :
Given: Principal = INR 12,000, Total amount = INR 15,000
Time = 5 years
So, simple interest = 15000 – 12000 = 3000
We know, Simple interest = $\frac{\text{Principal × Rate × Time}}{100}$
⇒ $3000=\frac{12000\times \text{Rate} \times 5}{100}$
⇒ Rate $=\frac{3000×100}{12000\times 5}$
⇒ Rate $=5\%$
Hence, the correct answer is 5%.
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