The amount becomes 12100 after 2 years and 13310 after 3 years, then find the rate of simple interest.

  1. 10%
  2. 12.5%
  3. 15%
  4. 8.5%

Answer (Detailed Solution Below)

Option 2 : 12.5%
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Detailed Solution

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Given:

The amount for 2 years = 12100

The amount for 3 years = 13310

Formula used:

Simple Interest = (Principal × rate × time)/100

Calculation:

Interest for 3rd year

⇒ 13310 – 12100 = 1210

Interest for 2 years = 1210 × 2 = 2420

Principal = 12100 - 2420 = 9680

Rate = (1210/9680) × 100 = 12.5%

∴ The rate of interest is 12.5%.
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