Question : On a certain sum, the Simple Interest at the end of $6\frac{1}{4}$ years becomes $\frac{3}{8}$th of the sum. The Rate of interest is:
Option 1: 5%
Option 2: 6%
Option 3: 7%
Option 4: 8%
Correct Answer: 6%
Solution :
Given: Time = $6\frac{1}{4}$ = $\frac{25}{4}$ years
Simple Interest = $\frac{3}{8}\text{P}$
According to the question
SI = $\frac{\text{P×R×T}}{100}$, where $P$ is principal, $T$ is time in years and $R$ is the rate of interest per annum.
⇒ $\frac{3}{8}\text{P}$ = $\frac{\text{P×R×25}}{100×4}$
⇒ $\text{R}$ = 6%
Hence, the correct answer is 6%.
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