What is the rate of simple interest for the last 5 years if the sum of ₹480 becomes ₹792 in 11 years and the rate of interest for the first 6 years is 5%?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → 7%
Simple interest is worked out on the original sum every year: \(\displaystyle SI=\frac{P\times R\times T}{100}\). The interest of the first 6 years and of the last 5 years together make up the total interest.
Total interest in 11 years \(=792-480=312\)
Interest for the first 6 years at 5% \(\displaystyle =\frac{480\times5\times6}{100}=144\)
Interest for the last 5 years \(=312-144=168\)
\(\displaystyle \frac{480\times R\times5}{100}=168\), that is \(24R=168\)
\(R=7\), so the rate for the last 5 years is 7%