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If rupee one amounts to rupees nine over a period of 20 years, find the rate of simple interest.
- A20%
- B10%
- C15%
- D22.5%
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Discussion 1
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CCommunity
We know SI = (P × R × T)/100
Where, SI = Simple interest; P = Principal; R = % rate of interest; T = time period in years
Also, total amount = Principal + Simple interest
Here, Principal amount = Re. 1 and total amount = Rs. 9
∴ simple interest = 9 – 1 = Rs. 8
T = 20 years
∴ 8 = (1 × R × 20)/100
⇒ R = 40% per annum
Where, SI = Simple interest; P = Principal; R = % rate of interest; T = time period in years
Also, total amount = Principal + Simple interest
Here, Principal amount = Re. 1 and total amount = Rs. 9
∴ simple interest = 9 – 1 = Rs. 8
T = 20 years
∴ 8 = (1 × R × 20)/100
⇒ R = 40% per annum