Interest as a fraction of the principal — Aptitude Question
Interest as a fraction of the principal: A sum becomes 9/8 of itself in 3 years at simple interest. What is the… Answer and worked solution on CodeKairo.
- Topic: Simple & Compound Interest
- Section: Quantitative Aptitude
- Difficulty: Hard
- Time target: 105 seconds
Question
A sum becomes 9/8 of itself in 3 years at simple interest. What is the rate of interest?
Options
- 3⅓%
- 4%
- 4⅙%
- 5%
Show the answer and the worked solution
Correct answer: C. 4⅙%
Worked solution
- Amount = 9P/8, so interest = P/8.
- P × R × 3/100 = P/8 → 3R/100 = 1/8.
- R = 100/24 = 4⅙%.
Answer: 4⅙%.
The idea
Convert 'becomes a fraction of itself' into the interest as a fraction of P; the principal then cancels out of the equation entirely.
Shortcut. The interest is 1/8 of P over 3 years, so 1/24 of P a year, and 100 ÷ 24 = 4⅙%.
Common trap. 4% — rounding 12.5% ÷ 3 down to a whole number; 4% for 3 years is only 12%, short of the 12.5% needed.
All Simple & Compound Interest questions · placement mock tests