# What will be the rate of Interest per annum

The Sum of money amounts to Rs.9800 after 5 years and Rs.12005 after 8 years at the same rate of simple interest. What is the rate of interest per annum?

- 5%
- 6%
- 10%
- 12%

**Answer: 7.5%
Explanation:**

Sum of money amount after 5 years = Rs. 9800

and amount after 8 years = 12005

Thus, Simple interest of 3 years = 12005 – 9800 = Rs. 2205

then, time = 3 years

**Formula **– Simple Interest = R x T x P/100

where, R = rate, T = Time, P = Principal

SI = Rs. 2205, Time = 3 years, P = Rs.9800 and rate =?

2205 = 9800 x 3 x R/100

R = 2205 x 100/9800 x 3

R = 7.5%