A) 5.65% | B) 5.75% |

C) 5.85% | D) 5.95% |

Explanation:

We are not given a value of P in this problem, so either pick a value

for P and stick with that throughout the problem, or just let P = P.

We have that t = 1, and r = .055. To find the effective rate of interest,

first find out how much money we have after one year:

A = Pert

A = Pe(.055)(1)

A = 1.056541P.

Therefore, after 1 year, whatever the principal was, we now have 1.056541P.

Next, find out how much interest was earned, I, by subtracting the initial amount of money from the final amount:

I = A − P

= 1.056541P − P

= .056541P.

Finally, to find the effective rate of interest, use the simple interest formula, I = Prt. So,

I = Pr(1) = .056541P

.056541 = r.

Therefore, the effective rate of interest is 5.65%

A) 3,000 | B) 2,500 |

C) 2,800 | D) 2,400 |

A) 5,000 | B) 4,800 |

C) 6,000 | D) 5,400 |

A) Rs. 2,560 | B) Rs. 2,480 |

C) Rs. 2,500 | D) Rs. 2,520 |

A) ₹10,200 | B) ₹11,400 |

C) ₹7,620 | D) ₹9,600 |

A) 25,650 | B) 26,750 |

C) 25,000 | D) 24,860 |

A) Rs. 600 | B) Rs. 520 |

C) Rs. 500 | D) Rs. 480 |