Question 56

₹480 is invested at simple interest. It becomes ₹520 after 20 months. What is the interest rate per annum?

Solution

SI = $$\frac{PRT}{100}$$ where, P is principle amount, R is rate of interest, T is time period.

According to the question, in 20 months interest is 520-480=40

So,from formula 40=480$$\times\frac{({20}{R})}{100}$$

$$\Rightarrow$$ R=$$\frac{5}{12}$$,So for getting rate of interest per annum we have to divide the interest by 12.

Hence, rate of interest per annum = $$\frac{5}{12}$$ $$\times$$12$$ $$ = 5%

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