At certain rate of simple interest, the ratio of the sum and the amount for a certain period of time is 4 : 5. After 3 more years, the ratio becomes 5 : 7. The rate of interest is:
Answer & explanation
Correct answer: option 2
Principal : Amount
At present , 4 : 5
After 3 years , 5 : 7
As principal is same . So,
Principal : Amount
At present , ( 4 : 5 ) × 5
After 3 years , ( 5 : 7 ) × 4
At present , 20 : 25
After 3 years , 20 : 28
So, Simple Interest of 3 years = 3
Simple Interest of 1 year = 1
Rate of interest = (SI / P) × 100%
= (1 / 20) × 100%
= 5%
The correct answer is Option (2) → 5%