The ratio of a principal and the total amount with r% simple interest rate on that principal after 1 year is a : b then value of r in terms of a, b is

Given:

Principal : Amount = a : b

Time (T) = 1 year

Formula Used:

Simple Interest (SI) =

Amount (A) = Principal (P) + Simple Interest (SI)

Calculations:

Let Principal = a units and Amount = b units

Simple Interest (SI) = b - a units

Using SI =

⇒ b - a =

⇒ 100 × (b - a) = a × r

⇒ r =

The correct answer is Option (1).