David gave a loan of Rs 600 to Rohit and recovered it at the rate of Rs 120 each month for six month...........

Quantitative Aptitude (CDS) Compound Interest

David gave a loan of Rs. 600 to Rohit and recovered it at the rate of Rs.120 each month for six months, commencing from the end of 1st month. What is the effective rate of simple interest per annum?

35%

40%

45%

50%

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Explanation:

Principal = Rs. 600
Amount = Rs. 120×6 = Rs.720
Interest = Rs.720-600 = Rs. 120
Time = 6 months = 6/12years
120 = (600×1×r) / (2×100)
120(2×100) = (600×r)
r = (240×100)/600
r = 40%