The simple interest on a sum after 4 years is \(\frac{1}{5}\) of the sum. The rate of interest per annum is:
1. 4%
2. 6%
3. 5%
4. 8%
1. 4%
2. 6%
3. 5%
4. 8%
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Correct Answer – Option 3 : 5%
Given:
SI = 1/5 × P
T = 4 yr
Formula used:
SI = P × R% × T
Calculation:
SI = P × R% × T
⇒ 1/5 × P = P × R/100 × 4
⇒ 20/4 = R
⇒ R = 5%
∴ The rate of interest per annum is 5%.