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If principal is Rs.5000 and amount after 1 year is Rs.5500, the rate of simple interest is
A5%
B10%
C15%
D8%
Answer & Solution
Correct answer: B. 10%
1. Simple Interest = Amount - Principal = 5500 - 5000 = 500.
2. SI = PRT/100; here P = 5000, T = 1, SI = 500.
3. 500 = 5000 * R * 1 / 100 = 50R.
4. R = 500/50 = 10%.
_Source: ICAI BoS Foundation Paper 3, Ch 4 'Math of Finance', p.4_
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