Question

Ratio of principal to the amount got after a certain time at a certain rate of simple interest is 4 : 5. After three more years the ratio becomes 5 : 7. What is the rate of interest?
1. 4.5%
2. 8%
3. 4%
4. 5%

Answer 1

Correct Answer - Option 4 : 5%

Ratio of Principal to amount is 4 : 5      ----(1)

Ratio of principal to amount after three years will be 5 : 7      ---(2)

Multiplying equation (1) by 5 and equation (2) by 4 we get

Ratio of Principal to amount will be 20 : 25       ----(3)

Ratio of principal to amount after three years will be 20 : 28      ---(4)

Let P be 20 units and Amount after 3 years be 28 unit

SI = 28 – 25 = 3 unit

As we know,

SI = Prt/100

3 = (20 × r × 3)/100

⇒ r = 5%

∴ Required rate of interest sis 5%