Correct Answer - Option 2 : 4%

**Given**

Time = 8 years

Principal for A = Rs. 5000

Principal for B = Rs. 8000

**Formula used**

Simple interest = (p × r × t)/100

Where p, r and t are principal, rate and time respectively

**Calculation**

(8000 × r × 8)/100] = [(5000 × r × 8)/100] + 960

⇒ (8000 × r × 8)/100] - [(5000 × r × 8)/100] = 960

⇒ 640r - 400r = 960

⇒ 240r = 960

⇒ r = 4%

**∴ Rate of interest is 4%**