Question

Find the rate of interest if the amount after 2 years of simple interest on a capital of Rs. 1200 is Rs. 1440.

Answer 1

Solution!!

The concept of simple interest has to be used here. The principal, amount and time is given in the question. According to the question, we have to find the rate of interest.

Principal (P) = Rs 1200

Amount = Rs 1440

Time (T) = 2 years

Rate of interest (R) = ?

Let's find the interest first! The calculations will be easier by doing these steps.

Amount = Principal + Interest

1440 = 1200 + Interest

Interest = 1449 - 1200

Interest = Rs 240

Now that we know the interest, we can easily find the rate of interest using the interest formula.

Interest = (P × R × T)/100

240 = (1200 × R × 2)/100

240 = 12 × R × 2

240 = 24 × R

R = 240 ÷ 24

R = 10

Hence, the rate of interest is 10% per annum.