Simple Interest — Mr. Patel borrows ₹ 8000 at simple interest. After 2 years he repays ₹ 8800 (₹ 800 more than he borrowed) and clears the loan. What is the annual rate of interest?

Introduction / Context:This is a direct simple-interest rate computation from the difference between amount repaid and principal.

Given Data / Assumptions:

• Principal P = ₹ 8000.
• Time t = 2 years.
• Amount repaid A = ₹ 8800, so total simple interest SI = ₹ 8800 − ₹ 8000 = ₹ 800.

Concept / Approach:Under simple interest: SI = P * r * t, where r is the annual rate in decimal.

Step-by-Step Solution:SI = 800.P * r * t = 8000 * r * 2 = 800.So r = 800 / (8000 * 2) = 800 / 16000 = 0.05.Convert to percent: r = 5% per annum.

Verification / Alternative check:At 5% per annum for 2 years: SI = 8000 * 0.05 * 2 = 800. Amount = 8000 + 800 = 8800, which matches the repayment.

Why Other Options Are Wrong:6% or 8% produce higher interest than ₹ 800 over 2 years; 4% produces less.

Common Pitfalls:Forgetting to convert the rate to decimal (divide by 100) when using the formula.

Final Answer:5%