With a given rate of simple interest, the ratio of principal and amount for a certain period of time is 4 : 5. After 3 years, with the same rate of interest, the ratio of the principal and amount becomes 5 : 7. The rate of interest is?
Answer & explanation
Correct answer: option 3
P : A ⇒ P : A
4 : 5 after 3 years 5 : 7
Since P remains same
20 : 25 20 : 28
28 - 25 = 3 ( in 3 years)
SI in 1 year = \(\frac{3}{3}\) = 1
Rate = \(\frac{1}{20}\) × 100 % = 5%