If an amount of Rs. 5,000 earned a simple interest of Rs. 500 ove

If an amount of Rs. 5,000 earned a simple interest of Rs. 500 ove
| If an amount of Rs. 5,000 earned a simple interest of Rs. 500 over 2 years, what is the rate of simple interest?

A. 4%

B. 2%

C. 5%

D. 5.5%

Please scroll down to see the correct answer and solution guide.

Right Answer is: C

SOLUTION

As we know, S.I = (P × r × t)/100

⇒ SI = 500, P = 5,000 and time = 2 years

⇒ 500 = (5,000 × 2 × r)/100

⇒ r = 5%

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