What is the rate of simple interest at which Rs. 14,000 gives interest of Rs. 1960 in two years ?

Options

A. `4%`
B. `5%`
C. `7%`
D. `10%`

Answer

To find the rate of simple interest at which Rs. 14,000 gives an interest of Rs. 1,960 in two years, we can use the formula for simple interest:

### Step 1: Understand the Simple Interest Formula
The formula for calculating simple interest (SI) is:
\[ SI = \frac{P \times R \times T}{100} \]
Where:
- \( SI \) = Simple Interest
- \( P \) = Principal amount (the initial sum of money)
- \( R \) = Rate of interest per annum
- \( T \) = Time in years

### Step 2: Plug in the Known Values
From the question, we know:
- \( SI = 1960 \)
- \( P = 14000 \)
- \( T = 2 \)

Substituting these values into the formula gives:
\[ 1960 = \frac{14000 \times R \times 2}{100} \]

### Step 3: Simplify the Equation
To eliminate the fraction, we can multiply both sides by 100:
\[ 1960 \times 100 = 14000 \times R \times 2 \]
This simplifies to:
\[ 196000 = 28000R \]

### Step 4: Solve for R
Now, we can solve for \( R \) by dividing both sides by 28000:
\[ R = \frac{196000}{28000} \]

Calculating this gives:
\[ R = 7 \]

### Step 5: Conclusion
Thus, the rate of simple interest is:
\[ \text{Rate} = 7\% \]

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