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    Question

    A sum was put at simple interest. The amount after 4 years

    became (96/80) times the amount it had become in 2 years. What is the annual rate of interest?
    A 12.5% Correct Answer Incorrect Answer
    B 18% Correct Answer Incorrect Answer
    C 25% Correct Answer Incorrect Answer
    D 15.6% Correct Answer Incorrect Answer

    Solution

    ATQ,

    Let the rate of interest be β€˜r%’ p.a.

    Let the amount after 2 years be Rs. β€˜80x’

    So, amount after 4 years = (96/80) Γ— 80x = Rs. β€˜96x’

    Interest in 2 years = 96x – 80x = Rs. β€˜16x’

    So, yearly interest = 16x / 2 = Rs. β€˜8x’

    Principal = 80x – 8x Γ— 2 = Rs. β€˜64x’

    ATQ,

    64x Γ— (r / 100) Γ— 1 = 8x

    r = (8x Γ— 100) / 64x = 12.5

    The rate of interest = r = 12.5%

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