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%