Question

An auto driver deposits Rs. 40,000 in his savings account that earns him simple interest . After 2 years, the account balance is Rs. 47,200. Find the rate of interest​

Answer 1

SOLUTION

GIVEN

• An auto driver deposits Rs. 40,000 in his savings account that earns him simple interest

• After 2 years, the account balance is Rs. 47,200

TO DETERMINE

The rate of interest

FORMULA TO BE IMPLEMENTED

In case of Simple interest

Principal = P

Interest = I

Interest = I Time = t

Rate of interest = r %

Then

$\displaystyle \sf{}I = \frac{Prt}{100}$

EVALUATION

Here it is given that an auto driver deposits Rs. 40,000 in his savings account that earns him simple interest . After 2 years, the account balance is Rs. 47,200

So

Principal = P = 40000

Interest = I = 47200 - 40000 = 7200

Time = t = 2 years

Let Rate of interest = r %

We know that in case of simple interest

$\displaystyle \sf{}I = \frac{Prt}{100}$

$\implies \displaystyle \sf{}7200= \frac{40000 \times r \times 2}{100}$

$\implies \displaystyle \sf{}7200= 800r$

$\implies \displaystyle \sf{}800r = 7200$

$\implies \displaystyle \sf{}r = 9$

Hence the rate of interest = 9 %

FINAL ANSWER

The required rate of interest = 9 %

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