Question

A sum becomes 10/9 times itself in 1 yr. Find the rate of simple interest.

Answer 1

Dear Student,

◆ Answer -

Interest rate = 11.11 p.c.p.a.

● Explaination -

For simple interest,

Payback = Principal (100 + interest rate × time) / 100

Given that Payback = 10/9 × principal

10/9 × principal = Principal (100 + interest rate × 1) / 100

10/9 = (100 + interest rate × 1) / 100

100 × 10/9 = 100 + interest rate

Interest rate = 111.11 - 100

Interest rate = 11.11 %

Hence, rate of interest is 11.11 p.c.p.a.

Thanks dear...