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      Question

      An amount was invested at a simple interest rate. After 6

      years, it amounted to (126/108) times the amount it had reached in 4 years. What is the rate of interest per annum?
      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 ‘r%’ p.a.

      Let the amount after 4 years = Rs. ‘108x’

      So, amount after 6 years = (126/108) × 108x = Rs. ‘126x’

      Interest in 2 years = 126x – 108x = Rs. ‘18x’

      So, yearly interest = 18x / 2 = Rs. ‘9x’

      Principal = 108x – 9x × 4 = Rs. ‘72x’

      ATQ,

      72x × (r / 100) × 1 = 9x

      r = (9x × 100) / 72x = 12.5

      The rate of interest = r = 12.5%

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