Question : If the ratio of principal and the simple interest for 5 years is 10 : 3, then the rate of interest is:
Option 1: 5%
Option 2: 6%
Option 3: 8%
Option 4: 3%
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Correct Answer: 6%
Solution :
According to the question,
$\frac{\text{Principal}}{\text{Simple interest}}=\frac{10}{3}$
Let, Principal = Rs. 10
Simple Interest (SI) for 5 years = Rs. 3
So, SI for 1 year = $\frac{3}{5} =0.6$
$\therefore$ Rate = $\frac{\text{Simple interest}\times 100}{\text{Principal × Time}}=\frac{0.6\times 100}{10 \times 1}=6$%
Hence, the correct answer is 6%.
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