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 = 4 : 5      ----(i)

Ratio of principal to amount after three years = 5 : 7      ----(ii)

From (i) and (ii), we get

Principal = 20 units, Amount after certain time = 25 units,

Amount after another 3 years = 28 units

⇒ SI = 28 - 25 = 3 unit

As we know,

SI = Prt/100

⇒ 3 = (20 × r × 3)/100

∴ r = 5%