Question

Warren Buffett lends Rs. 80 and collects Rs. 86 at the end of 6 months. The rate of
interest p.a. is?​

Answer 1

Answer:

15%

Step-by-step explanation:

Simple Intrest = 86 - 80 = 6 rs.

$6 \: months = \frac{6}{12} = \frac{1}{2} year$

We know that,

$rate \: = \frac{simple \: intrest \times 100}{principle \times time}$

So,

$rate = \frac{6 \times 100}{80 \times \frac{1}{2} } = \frac{6 \times 100}{40} = 15\%$

Answer 2

Answer:

The rate of interest p.a. is 15%

Step-by-step explanation:

Concept :

• Interest is a portion of your amount that you pay to a bank or credit card business if you owe them money in exchange for using their funds. Usually, it is displayed as an annual percentage rate, such as 6.00% pa (pa stands for "per annum," which means "per year").

• We know that simple interest is actually a quick and simple formula for figuring out how much interest will be charged on a loan. Furthermore, the daily interest rate, the principle, and the number of days between payments are multiplied to calculate simple interest.

• Although some mortgages employ this calculation approach, this kind of interest typically relates to auto loans or short-term loans.

• We can say that the amount that a lender charges a borrower is called an interest rate, and it is expressed as a percentage of the principal, or the loaned amount.
• Typically, a loan's interest rate is actually really expressed as an annual percentage rate, or APR (APR). A savings account or certificate of deposit earnings at a bank or credit union may also be subject to an interest rate (CD).
• Also here the interest received on these deposit accounts is measured in annual percentage yields (APY).

Given :

The money that warren Buffett lends : 80 Rs

The money that warren Buffett collects : 86 Rs

Total time = 6 months

To find :

Rate of interest p.a at the end of 6 month ?

Solution :

Simple interest = 86 - 80 = 6 Rs

6 months = 6/12 = 1/2 years

We know that,

Rate = (simple interest x 100) / ( principle x time)

So by substituting the values given to us, we get :

Rate = (6x100) / (80 x 1/2)

= ( 6 x 100) / 40

= 15%

Therefore according to our calculation, the rate of interest p.a is to be 15%.

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