PRC-2 · Chapter 5 · Question 10 of 50
A business investment generated exactly Rs. 1,500 in simple interest over a 3-year term based on an initial principal of Rs. 10,000. What was the annual interest rate?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) 5%
Explanation
Using the formula I = PRT: 1,500 = 10,000 * R * 3. Therefore, 1,500 = 30,000 * R. Solving for R yields 1,500 / 30,000 = 0.05, which is 5%.
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