Q.At what annual interest rate will the interest on a principal amount become \(\cfrac{5}{16}\) of the principal in 6\(\cfrac{1}{4}\) years? (a) 3% (b) 4% (c) 5% (d) 6%
Answer: C
Let’s assume the principal amount \((p)= x\) rupees
\(\therefore\) Interest amount \((I)= \cfrac{5x}{16}\) rupees
Time \((t)=6\cfrac{1}{4} \) years \(=\cfrac{25}{4} \) years
Rate of interest \((r)= \%\)

\(\therefore\) Rate of interest \((r)=\cfrac{100\times I}{pt} \%\)

\(=\cfrac{100\times \cfrac{5x}{16}}{x\times \cfrac{25}{4}} \%\)

\(=\cfrac{\cancel{100}\cancel4\times 5\cancel x\times \cancel4}{\cancel x\times \cancel{25} \times \cancel{16}\cancel4} \%\)

\(=5 \%\)

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