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) Rs.2628 | B) Rs.2662 |

C) Rs.2600 | D) Rs.3200 |

A) Rs.400 | B) Rs.390 |

C) Rs.380 | D) Rs.350 |

A) Rs. 2000 | B) Rs. 2050 |

C) Rs. 2100 | D) Rs. 2150 |

A) 21750 | B) 22050 |

C) 23250 | D) 24650 |

A) Rs.9000 | B) Rs.9500 |

C) Rs.10,000 | D) Rs.10,500 |

A) 3 years | B) 4 years |

C) 2 years | D) 1 year |