Question

At the same rate of simple interest, sum of the interest at a principal of 300 for 4 years and the interest at a principal of 400 for 3 years is 120. The rate of interest is
1. 5%
2. 4%
3. 6%
4. 10%

Answer 1

Correct Answer - Option 1 : 5%

Given:

Rate of interest is constant

Sum of the interest at a Principal of 300 for 4 years and the interest at a Principal of 400 for 3 years is 120

Formula Used:

Simple Interest is obtained as:

SI = (P × R × T)/100,

where P = Principal, R =Rate of Interest, T =Time period

Calculation:

From the formula for Simple Interest, we get:

[(300 × R × 4)/100] + [(400 × R × 3)/100] = 120

⇒ 12R + 12R = 120

⇒ R = 120/24 = 5

∴ The rate of interest is 5%