Question
A sum of money becomes ₹12,000 in 2 years and
₹14,400 in 4 years at simple interest. What is the rate of interest per annum?Solution
Difference in amount for 2 years = ₹14,400 - ₹12,000 = ₹2,400. Interest for 2 years = ₹2,400. Interest for 1 year = ₹2,400 ÷ 2 = ₹1,200. Principal = ₹12,000 - ₹2,400 = ₹9,600. Rate of interest = (Interest × 100) ÷ (Principal × Time) = (1,200 × 100) ÷ (9,600 × 1) = 12.5%.
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