Test Index

Time Value of Money

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Question : 26 of 99

Marks: +1, -0

If the simple interest on

\text{Rs. }1,200

be more the interest on

\text{Rs. 1,000}

\text{Rs. 30}

in 3 year. Find the rate percent per annum.

$7\%$
$6\%$
$5\%$
None

Solution:

Concept:

Simple interest formula:

\text{SI} = \frac{P \times R \times T}{100}

.

Explanation:

Let the rate be

R\%

per annum.

SI on ₹1,200 for 3 years:

\frac{1200 \times R \times 3}{100} = 36R

.

SI on ₹1,000 for 3 years:

\frac{1000 \times R \times 3}{100} = 30R

.

Difference:

36R - 30R = 6R

.

Given that this difference equals ₹30, so

6R = 30

.

Solving:

R = 5

.

Answer:

Rate percent per annum is 5%.

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