Question

A sum of money is lent for 5 years at R% simple interest per annum. If the interest earned be one -forth of the money lent , find the value of R..

Answer 1

Hope this will help :)

Answer 2

The value of R, rate is 5% p.a.

Let the money lent (the principal amount) be Rs P.

Rate of S.I. = R% p.a.

Time taken (T) = 5 years.

So, Simple Interest (S.I.) is given as:

S.I. = (P × R × T)/100

= (5PR / 100) =  PR/20.

Given that S.I. equals to one-fourth of the principal.

So, S.I. = P/4

Thus, P/4 = PR/20                                      [As both are the values for S.I.]

⇒4R = 20

⇒ R = 20/4 = 5

R = 5% p.a.