A sum of money amounts to Rs. 9800 after 5 years and Rs. 12005 after 8 years at the same rate of simple interest. The rate of interest per annum is:

5%
8%
12%
15%

Correct Answer: 12%

Explanation:

S.I. for 3 years = Rs. (12005 - 9800) = Rs. 2205.

S.I. for 5 years = Rs. $\frac{2205}{3} \times 5$ = Rs.3675

Principle = Rs.(9800-3675) = Rs.6125

Hence, Rate = $\frac{100 \times 3675}{6125 \times 5}$ =12%

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