A sum of money lent at simple interest amounts to Rs 11,800 after 2 years and to Rs 13,000 after 4 years. What is the rate of simple interest per annum?

Explanation

Interest for 2 years = 13,000 − 11,800 = Rs 1,200, so yearly interest is Rs 600. Principal = 11,800 − 1,200 = Rs 10,600 (2 years of interest is 1,200). Rate = 600/10,600 is not clean, so recheck: principal = 11,800 − 2×600 = Rs 10,600. Rate = 600/10,600 ≈ 5.66%, which does not match any option; hence data must be reread: amounts imply principal 10,600.

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