Given that the interest is only earned on principal, if an investment of RS.1000.00 amount to RS.1440.00 in two years, then what is the rate of interest earned?

Solution:

The rate of interest earned can be found using the formula:

I = Ptr/100

Where P is the principal, t is the time in years

r is the rate of interest, I is the interest earned

It is given that

I = 1440 - 1000 = 440

t = 2 years

r = ?

P = 1000

Substituting it in the formula, we get

440 = (1000 × 2 × r)/100

By further calculation,

440 = 2000r/100

44000 = 2000r

Divide both sides by 2000

r = 22

Therefore, the rate of interest is 22%.

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Given that the interest is only earned on principal, if an investment of RS.1000.00 amount to RS.1440.00 in two years, then what is the rate of interest earned?

Summary:

Given that the interest is only earned on principal, if an investment of RS.1000.00 amount to RS.1440.00 in two years, then the rate of interest earned is 22%.