Question

Ramesh lent a loan of Rs 1800 to Suresh at a rate of interest for 2 years. At the end of period Suresh refunded him a total of Rs 2232. At what rate of interest had Ramesh lent the loan? Ans: 12%

Answer 1

12%

Explanation:

Simple interest formula: A = P(1 + rt)

where:

• A = final amount
• P = principal
• r = interest rate (in decimal form)
• t = time (in years)

Given:

• A = Rs 2232
• P = 1800
• t = 2

Substitute given values into the formula and solve for r:

⇒ A = P(1 + rt)

⇒ 2232 = 1800(1 + r · 2)

⇒ 1.24 = 1 + r · 2

⇒ 0.24 = 2r

⇒ r = 0.12

Convert into percentage:

0.12 = 12/100 = 12%