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Question : The simple interest received on a sum for 20 years is $\frac{3}{5}$ of the sum. What is the annual rate of interest?

Option 1: 3%

Option 2: 4%

Option 3: 5%

Option 4: 6%


Team Careers360 23rd Jan, 2024
Answer (1)
Team Careers360 24th Jan, 2024

Correct Answer: 3%


Solution : The formula for calculating simple interest is given by:
Simple Interest (SI) = $\frac{P×R×T}{100}$, where
$P$ is the principal amount,
$R$ is the rate of interest per annum, and
$T$ is the time in years.
The simple interest received in 20 years = $\frac{3}{5}P$
⇒ $\frac{3}{5}×P = \frac{P×R×20}{100}$
⇒ $\frac{3}{5} = \frac{R×20}{100}$
⇒ $R = 3$%
Therefore, the annual rate of interest is $3$%.
Hence, the correct answer is 3%.

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