CA Foundation · Quantitative Aptitude · Mathematics of Finance
At what rate of simple interest per annum will ₹5,000 earn ₹1,200 interest in 4 years?
The rate is 6% per annum. Using simple interest I = P×R×T/100, the rate equals 1,200×100 divided by 5,000×4, which is 6. A check gives 5,000 × 6% × 4 = ₹1,200.
- A6%Correct
- B8%
- C5%
- D7.5%
Explanation
Rate = I×100/(P×T) = 1,200×100/(5,000×4) = 120,000/20,000 = 6%. Check: 5,000×6%×4 = 1,200. Dividing by only one year of principal-time would give 24%, and 8% would yield 1,600.
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