Question 152

If ratio of principal and simple interest for 1 year is 25 : 1, then the rate of interest is

Solution

Let the principal amount be P and Rate of interest be R and time period be T

SI = $$\frac{PxRxT}{100}$$

Given that :

$$\frac{P}{\frac{PxRxT}{100}}$$ = $$\frac{25}{1}$$

T = 1 year

$$\frac{100}{R}$$ = $$\frac{25}{1}$$

R = 4 %

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