The simple interest on a certain sum of money at the rate of 7.5% p.a. for 8 years is Rs. 4,080. At what rate of interest can the same amount of interest be received on the same sum for 5 years?
- A10.5%
- B12%
- C11%
- D9%
Solution & Step-by-step Explanation
Let the principal be P and the required rate of interest be R
2
%.
According to the formula for Simple Interest (SI):
SI=
100
P×R×T
For the first case:
SI=
100
P×7.5×8
For the second case, we want the same interest on the same sum for 5 years:
SI=
100
P×R
2
×5
Equating the two expressions for interest:
100
P×7.5×8
=
100
P×R
2
×5
Canceling P and 100 from both sides:
7.5×8=R
2
×5
60=5×R
2
R
2
=
5
60
=12%
2
%.
According to the formula for Simple Interest (SI):
SI=
100
P×R×T
For the first case:
SI=
100
P×7.5×8
For the second case, we want the same interest on the same sum for 5 years:
SI=
100
P×R
2
×5
Equating the two expressions for interest:
100
P×7.5×8
=
100
P×R
2
×5
Canceling P and 100 from both sides:
7.5×8=R
2
×5
60=5×R
2
R
2
=
5
60
=12%