Rate from the interest — Aptitude Question
Rate from the interest: At what rate of simple interest will ₹8,000 earn ₹1,920 in 4 years? Answer and worked solution on CodeKairo.
- Topic: Simple & Compound Interest
- Section: Quantitative Aptitude
- Difficulty: Easy
- Time target: 50 seconds
Question
At what rate of simple interest will ₹8,000 earn ₹1,920 in 4 years?
Options
- 5%
- 6%
- 7%
- 8%
Show the answer and the worked solution
Correct answer: B. 6%
Worked solution
- R = (100 × 1,920) / (8,000 × 4) = 192,000 / 32,000 = 6%.
Answer: 6%.
The idea
Rearrange the same formula for R. Checking is quick: 6% of 8,000 is 480 a year, and 480 × 4 = 1,920. ✓
Shortcut. 1% of 8,000 is 80, so ₹1,920 is 24% of the principal; spread over 4 years that is 6% a year.
Common trap. 5% — dividing by the amount (₹9,920) instead of the principal gives about 4.8%, which rounds to it. Simple interest is always a percentage of the principal.
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