Find the rate of interest if the amount after 2 years of simple interest on a capital of Rs. 1200 is Rs. 1440.

Solution(By Examveda Team)

$$\eqalign{ & {\text{Amount}},\,A = Rs.\,1440 \cr & {\text{Principal}},\,P = Rs.\,1200 \cr & {\text{Interest}},\,I = Rs.\,\left( {1440 - 1200} \right) = 240 \cr & R = \frac{{ {240 \times 100} }}{{ {1200 \times 2} }} = 10\% \cr & \cr & {\text{Alternatively}}, \cr & {\text{We}}\,{\text{can}}\,{\text{go}}\,{\text{through}}\,{\text{a}}\,{\text{thought}}\,{\text{process}}\,i.e. \cr & 1200\, == 20\% \uparrow \left( {240\,{\text{in}}\,2\,{\text{years}}} \right) ⇒ 1400 \cr & {\text{That}}\,{\text{means}}\,10\% \,{\text{rise}}\,{\text{in}}\,{\text{each}}\,{\text{year}} \cr} $$