Question

Find the sum of money that amounts to 26000 in 5 years at the interest rate of 6% per annum​

Answer 1

Answer:

Amount at the end of 5 years = Rs 2600

Amount at the end of 2 years = Rs 2000

Since the interest is simple interest, so Rs 600 is the interest accrued in 3 years.

Simple interest in every completed years is the same.

Therefore Simple interest for one year = Rs 600/3 = Rs 200

Simple interest for Two years = Rs 200 × 2 = Rs 400

Therefore Principal = Amount after 2 years — Interest for two years = Rs 2000 — Rs 400 = Rs 1600.

Rate of interest = [(interest for one year) × 100]/Principal = (200×100)/1600 = 100/8 = 25/2 = 12½% per annum.

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