A certain amount grows to ₹8000 in 2 years and ₹8800 in 3 years. Determine the simple interest rate per annum.

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Accepted Answer

1. Find one year interest: ₹8800 − ₹8000 = ₹800.

2. Two years' interest = ₹800 × 2 = ₹1600. So principal = ₹8000 − ₹1600 = ₹6400.

3. Rate = $\dfrac{\text{annual interest}}{\text{principal}} = \dfrac{800}{6400} = \dfrac{1}{8} = 0.125 = 12.5\%$.

4. So the rate is **12.5%**.

FINAL_ANSWER: c

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Answer

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