Simple Interest – Compare interests to find rate: For the same time period, the simple interest on ₹ 1230 for 2 years is ₹ 10 more than the simple interest on ₹ 1130 for 2 years. What is the annual simple interest rate?
Aptitude
Simple Interest
Difficulty: Easy
Choose an option
Answer
Correct Answer: 5%
Explanation
Introduction / Context:When time is the same, the difference in simple interest is proportional to the difference in principals.
Given Data / Assumptions:
- Difference in principal = 1230 - 1130 = ₹ 100
- Time = 2 years
- Difference in SI = ₹ 10
Concept / Approach:Let r be annual rate. Then difference in SI = (difference in principal) * r * t.
Step-by-Step Solution:100 * r * 2 = 10 → 200r = 10 → r = 10/200 = 0.05 = 5%
Verification / Alternative check:Compute SI for both amounts at 5% for 2 years to confirm a ₹ 10 gap.
Why Other Options Are Wrong:6%, 8%, 2% do not yield a ₹ 10 difference over 2 years for a ₹ 100 principal gap.
Common Pitfalls:Using 1 year by mistake or mixing percentage and decimal.
Final Answer:5%