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At what rate (in percentage) per annum will ₹1,300 give ₹650 as simple interest in 10 years?
8%
7%
5%
4%
5%
Since the interest ₹650 is exactly half of the principal ₹1300 over 10 years, the total interest rate is 50%. Dividing 50% by 10 years gives 5% per annum.
Principal P = ₹1300, Simple Interest SI = ₹650, Time T = 10 years
R=P×TSI×100
Since the interest ₹650 is exactly half of the principal ₹1300 over 10 years, the total interest rate is 50%. Dividing 50% by 10 years gives 5% per annum.
Confusing simple interest with compound interest or accidentally multiplying by 100 twice.
Identify given values
Extract variables from the problem: Principal P=1300, Simple Interest SI=650, and time T=10 years.
P=1300,SI=650,T=10
Apply Simple Interest formula
Use the standard formula for the rate of interest R=P×TSI×100.
R=1300×10650×100
Perform calculation
Simplify the fraction: 650×100=65000 and 1300×10=13000. Dividing 65000 by 13000 results in 5.
R=1300065000=5%
C is correct because the calculated rate of interest is 5% per annum.
This concept of simple interest is fundamental for Bank PO and Clerk exams; remember that SI is always a linear function of time, unlike compound interest which is exponential.
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