Question : A sum of INR 2000 will become INR 2400 in 12 months at some rate of simple interest. Find the rate of interest per annum.
Option 1: 25%
Option 2: 20%
Option 3: 40%
Option 4: 45%
Correct Answer: 20%
Solution :
Amount = INR 2400
Principal, $P$ = INR 2000
Time, $n$ = 1 year
Let $R$ be the rate.
Simple interest, SI = 2400 – 2000 = INR 400
Also, Simple interest = $\frac{\text{Principal×time×Rate}}{100}$
⇒ 400 = $\frac{2000×1×R}{100}$
⇒ $R$ = $\frac{400}{20}$ = 20%
Hence, the correct answer is 20%.
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