Suresh lent out a sum of money to Rakesh for 5 years at simple interest. At the end of 5 years. Rakesh paid 9/8 of the sum to Suresh to clear out the amount. Find the rate of simple interest per annum.

A. 3.5% p.a.

B. 2% p.a.

C. 3.5% p.a.

D. 2.5% p.a.

Answer: Option D

Solution(By Examveda Team)

$$\eqalign{ & 9/8 \cr & {\text{Principle}} = 8{\text{ unit}} \cr & {\text{Amount}} = 9{\text{ unit}} \cr & {\text{Interest}} = 9.8{\text{ unit}} \cr & {\text{S}}{\text{.I}}{\text{.}} = \frac{{8 \times 5 \times R}}{{100}} \cr & 1 = \frac{{40 \times R}}{{100}} \cr & R = \frac{{10}}{4} = 2.5\% {\text{ p}}{\text{.a}}{\text{.}} \cr} $$