With a given rate of simple interest, the ratio of principal and amount for a certain period of time is 2 : 3 . After 2 years, with the same rate of interest, the ratio of the principal and amount becomes 4 : 5 . The rate of interest is?
Answer & explanation
Correct answer: option 1
P : A ⇒ P : A
2 : 3 after 2 years 4 : 5
Since P remains same
4 : 6 4 : 5
6 - 5 = 1 ( in 2 years)
SI in 1 year = \(\frac{1}{2}\) = 0.5
Rate = \(\frac{0.5}{4}\) × 100 % = 12.5%