Q.If the ratio of the principal to its total amount after one year is 25:28, then the annual interest rate is—? (a) 3% (b) 12% (c) 10\(\frac{5}{7}\)% (d) 8%
Answer: B
Let’s assume the principal amount \((p)=25x\) rupees
Interest amount \((I)=(28x-25x)\) rupees

\(=3x\) rupees

Time \((t)=1\) year

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

\(=\cfrac{100\times 3x}{25x\times 1}\%\)

\(=12\%\)

So, the annual interest rate is 12%.
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