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Doctors Medicines MCQs Q&A

  1. 10%
  2. 7.8%
  3. 8.5%
  4. 8%
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1 Answers

Option 4 : 8%

Given:

The amount payable on maturity of a certain sum which is invested for 5 years at a certain rate percent p. a. is Rs. 9,800 and the amount payable on the same sum invested for 10 years at the same rate is Rs. 12,600. 

Concept used:

Simple Interest, SI = (P × R × T) ÷ 100

where

P = Principal amount

R = Rate of interest per year

T = Time in years

Calculation:

For the 10-year investment plan, Rs. 9800 would be considered as the principal amount.

Since the interest being calculated is simple interest, the interest incurred in 5 years = (12600 - 9800) = Rs. 2800

Hence, interest incurred every year = 2800 ÷ 5 = Rs. 560

Now considering the 5-year investment plan, the principal amount = (9800 - 2800) = Rs. 7000

Let the rate of interest be R%.

According to the question,

(7000 × R × 1)/100 = 560

⇒ R = (560 × 100) ÷ 7000

⇒ R = 8

∴ The rate of interest is 8% p.a.

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