A) 6%
B) 7.5%
C) 5%
D) 10%
Given:
P1 = Rs.800
P2 = Rs.400
Time = 2 years
Difference in S.I. = Rs.40
Formula used:
S.I. = (PRT)/100
Calculation:
(P1RT)/100 – (P2RT)/100 = 40
⇒ RT(800 – 400) = 4000
⇒ R = 4000/800
⇒ R = 5%
∴ The rate of simple interest is 5%.