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$A$ borrowed $Rs.5000$ from $B$ on simple interest after $8$ years receives $Rs.2000$ more than the amount given to $A$ on loan. Find the rate of interest.

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Last updated date: 14th Jul 2024
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Answer
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Hint: Interest would be the total amount received, which in this question is given to be $Rs.5000$ and the principal amount would be the extra amount that is received.

Note: Do not mistake the value of S.I to be the principal amount or vice-versa, whenever it is given that the extra amount received is the S.I and the amount invested or in this case borrowed is the principal amount.

Therefore, we are going to use the formula of calculating simple interest where the principal amount is $Rs.5000$, interest would be $Rs.2000$, time is given as $8$ years.

On putting the above values in the formula of simple interest, we get,
$S.I = \dfrac{{principal \times rate \times time}}{{100}}$
$rate = \dfrac{{2000 \times 100}}{{5000 \times 8}} = 5\% $

The rate of interest in this question is $5\% $ .