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Question : A sum of Rs. 2,000 becomes Rs. 3,120 in two years at a certain rate of simple interest. What is the rate of interest per annum?

Option 1: 34% per annum

Option 2: 33% per annum

Option 3: 30% per annum

Option 4: 28% per annum


Team Careers360 11th Jan, 2024
Answer (1)
Team Careers360 20th Jan, 2024

Correct Answer: 28% per annum


Solution : Principle amount (P) = Rs. 2,000
Amount after two years (A) = Rs. 3,120
Number of years (t) = 2
Interest earned = I = A - P = Rs. 3,120 - Rs. 2,000 = Rs. 1120
Use the formula below.
Simple Interest = $\frac{\text{Principle×Rate×Time}}{100}$

⇒ r = $\frac{(\text{I}\times{100})}{(\text{P}\times{\text{t}})}$
⇒ r = $\frac{(1,120\times100)}{(2,000\times2)}$
⇒ r = 28
So, the annual rate of interest is 28% per annum
Hence, the correct answer is 28% per annum.

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