Ratio of principal and the amount after 2 years is 20: 30. Find the rate of simple interest per year.15 %12.5 %20 %25 %
Question
Ratio of principal and the amount after 2 years is 20: 30. Find the rate of simple interest per year.15 %12.5 %20 %25 %
Solution
To find the rate of simple interest, we can use the formula for simple interest which is I = PRT/100, where I is the interest, P is the principal, R is the rate, and T is the time.
From the problem, we know that the ratio of the principal to the amount after 2 years is 20:30. This means that for every 20 units of principal, we have 30 units after 2 years. The difference between the principal and the amount after 2 years is the interest. So, the interest is 30 - 20 = 10 units.
We can set up the equation as follows:
10 = 20 * R * 2 / 100
Solving for R, we get:
R = 10 * 100 / (20 * 2)
R = 25 %
So, the rate of simple interest per year is 25%.
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