A sum of Rs. 2500 amounts to Rs. 3875 in 4 years at the rate of simple interest. What is the rate of interest?
Correct answer: D. 13.75%
- A. 12.25%
- B. 12%
- C. 6%
- D. 13.75%
Explanation
The simple interest is Rs. 3875 - Rs. 2500 = Rs. 1375 over 4 years. The rate is Rs. 1375/(Rs. 2500 x 4 years) x 100 = 13.75% per annum. The likely trap is 12%, which may come from using an incorrect interest amount or omitting part of the 4-year period.
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Profit and loss compare the cost price and selling price of an item, using profit or loss percentages based on the cost price unless stated otherwise. Questions include marked price, discount, successive discounts, commission, and finding an unknown price, with care needed to distinguish discount from loss.
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