Question

Find the rate of interest if amount after 2 years on simple interest on a capital of Rs. 1000 is Rs. 1200.
1. 5 percent
2. 20 percent
3. 10 percent
4. 15 percent

Answer 1

Correct Answer - Option 3 : 10 percent

Given:

Amount = Rs. 1200

Principal = Rs. 1000

Time = 2 years

Formula used:

(i) SI = PRT/100

(ii) A = SI + P

Where, A = Amount

SI = simple interest

P = principal

R = rate

T = time

Calculations:

SI = (P × R × T)/100

⇒ SI = (1000 × R × 2)/100

⇒ SI = 20R

A = SI + P

⇒ 1200 = 20R + 1000

⇒ 200 = 20R

⇒ R = 10%

∴ The rate of interest is 10%.