Mr. Patel borrowed Rs. 8000 from Mr. Chobey at simple interest. After 2 years he paid Rs. 800 more than what be borrowed and thus cleared the loan. What was the rate of interest ?

Options

A. 6
B. 8
C. 5
D. None of these

Answer

To find the rate of interest that Mr. Patel paid on his loan, we can follow these steps:

### Step 1: Identify the given values
- Principal (P) = Rs. 8000
- Total amount paid after 2 years = Rs. 8000 + Rs. 800 = Rs. 8800
- Time (T) = 2 years

### Step 2: Calculate the Simple Interest (SI)
The total amount paid after 2 years is Rs. 8800. The interest paid can be calculated as:
\[ \text{SI} = \text{Total Amount} - \text{Principal} \]
\[ \text{SI} = 8800 - 8000 = Rs. 800 \]

### Step 3: Use the Simple Interest formula
The formula for Simple Interest is:
\[ \text{SI} = \frac{P \times R \times T}{100} \]
Where:
- SI = Simple Interest
- P = Principal
- R = Rate of interest
- T = Time in years

### Step 4: Rearrange the formula to find R
To find the rate of interest (R), we can rearrange the formula:
\[ R = \frac{\text{SI} \times 100}{P \times T} \]

### Step 5: Substitute the known values into the formula
Now, substitute the values we have:
- SI = Rs. 800
- P = Rs. 8000
- T = 2 years

So:
\[ R = \frac{800 \times 100}{8000 \times 2} \]

### Step 6: Calculate R
Now, calculate R:
\[ R = \frac{80000}{16000} = 5 \]

### Conclusion
The rate of interest (R) is 5%.

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