Mathematics for FinanceMTP Dec 23 Series IIQuestion 3951 of 507
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The simple interest on 600\displaystyle 600 for 9 months is 27\displaystyle 27. Find the interest rate.

Options

A6%\displaystyle 6\%
B12%\displaystyle 12\%
C2.2%\displaystyle 2.2\%
DNone of these
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Correct Answer

Option a6%\displaystyle 6\%

All Options:

  • A6%\displaystyle 6\%
  • B12%\displaystyle 12\%
  • C2.2%\displaystyle 2.2\%
  • DNone of these

Detailed Solution & Explanation

Given parameters: * Principal (P\displaystyle P) = Rs. 600\displaystyle \text{Rs. }600 * Time (t\displaystyle t) = 9\displaystyle 9 months = 912=0.75\displaystyle \frac{9}{12} = 0.75 years * Simple Interest (SI\displaystyle SI) = Rs. 27\displaystyle \text{Rs. }27 The formula for Simple Interest is: SI=P×r×t100SI = \frac{P \times r \times t}{100} Substituting the values: 27=600×r×0.7510027 = \frac{600 \times r \times 0.75}{100} 27=6×0.75×r27 = 6 \times 0.75 \times r 27=4.5r27 = 4.5 r Solving for r\displaystyle r: r=274.5=6% p.a.r = \frac{27}{4.5} = 6\% \text{ p.a.} The interest rate is 6%\displaystyle 6\%. Hence, **Option A** is the correct answer.

More Questions from Mathematics for Finance

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If Rs. 1,000\displaystyle \text{Rs. }1,000 be invested at interest rate of 5%\displaystyle 5\% and the interest be added to the principal every 10\displaystyle 10 years, then the number in years in which it will amount to Rs. 2,000\displaystyle \text{Rs. }2,000 is:

If an amount is kept at S. I. it earns an interest of Rs. 600\displaystyle \text{Rs. }600 in first two years but when kept at compound interest it earns an interest of Rs. 660\displaystyle \text{Rs. }660 for the same period, then the rate of interest and principal amount respectively are:

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