Question
A man invested Rs. 5000 at some rate of simple interest and Rs. 4000 at 1 percent higher rate of interest. If the interest in both the cases after 4 years is same, the rate of interest in the former case is
Answer: Option A
Let the rates of interest in the former and latter cases be R% and (R + 1) % p.a.
Then,
$$\eqalign{
& 5000 \times {\text{R}} \times 4 = 4000 \times \left( {{\text{R}} + 1} \right) \times 4 \cr
& \Rightarrow \frac{{{\text{R}} + 1}}{{\text{R}}} = \frac{{5000 \times 4}}{{4000 \times 4}} \cr
& \Rightarrow 1 + \frac{1}{{\text{R}}} = 1 + \frac{1}{4} \cr
& \Rightarrow {\text{R}} = 4 \cr
& {\text{Hence,}} \cr
& {\text{Required rate}} = 4\% \,{\text{p}}{\text{.a}}{\text{.}} \cr} $$
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Let the rates of interest in the former and latter cases be R% and (R + 1) % p.a.
Then,
$$\eqalign{
& 5000 \times {\text{R}} \times 4 = 4000 \times \left( {{\text{R}} + 1} \right) \times 4 \cr
& \Rightarrow \frac{{{\text{R}} + 1}}{{\text{R}}} = \frac{{5000 \times 4}}{{4000 \times 4}} \cr
& \Rightarrow 1 + \frac{1}{{\text{R}}} = 1 + \frac{1}{4} \cr
& \Rightarrow {\text{R}} = 4 \cr
& {\text{Hence,}} \cr
& {\text{Required rate}} = 4\% \,{\text{p}}{\text{.a}}{\text{.}} \cr} $$
Was this answer helpful ?
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