A sum becomes $\dfrac{9}{8}$ of itself in $2$ years at simple interest. The annual rate is
A sum becomes $\dfrac{9}{8}$ of itself in $2$ years at simple interest. The annual rate is
$5\%$
$6\%$
$6.25\%$
$8\%$
Solution
Amount $= \dfrac{9}{8} P$, so SI $= \dfrac{9}{8} P - P = \dfrac{P}{8}$. Then $\dfrac{P \cdot R \cdot 2}{100} = \dfrac{P}{8} \Rightarrow R = \dfrac{100}{16} = 6.25\%$.