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A sum of ₹12000 grew to ₹14880 in 4 years under simple interest. Find the rate per cent per annum.

Class 7Comparing QuantitiesComparing Quantities
  • A24%
  • B6%
  • C31%
  • D4.84%

Step-by-Step Solution

First strip out the interest: SI = = ₹2880. Then . 24% is the trap of forgetting the 4 years and computing — that is the interest over the whole period, not per annum. 31% uses the amount ₹14880 as the interest, and 4.84% uses the amount as the principal.
Answer: B) 6%

Key idea: Simple interest

When you lend (or borrow) money, the borrower pays the lender extra for the use of the money — that extra is **interest**. **Simple interest** is calculated only on the original principal, not on past interest.

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where = principal (₹), = rate per annum (% per year), = time in years.

Example: ₹2000 at 5% for 3 years: SI = . Total amount = ₹2300.

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