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With a given rate of simple interest, th...

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 per annum is

A

`4%`

B

`5%`

C

`6%`

D

`7%`

Text Solution

AI Generated Solution

The correct Answer is:
To solve the problem, we need to find the rate of interest per annum based on the given ratios of principal and amount. ### Step-by-Step Solution: 1. **Understanding the Ratios**: - The first ratio of Principal (P) to Amount (A) is given as 4:5. This means: \[ \frac{P}{A} = \frac{4}{5} \] - From this, we can express the amount A in terms of P: \[ A = \frac{5}{4}P \] 2. **Using the Simple Interest Formula**: - The amount A can also be expressed using the formula for simple interest: \[ A = P + \text{SI} \] - The simple interest (SI) for a time period of t years at a rate R% is given by: \[ \text{SI} = \frac{P \cdot R \cdot t}{100} \] - For the first case, we do not have the time, so we denote it as \( t_1 \). 3. **Setting Up the Equation for the Second Ratio**: - After 3 years, the new ratio of Principal (P) to Amount (A) is given as 5:7: \[ \frac{P}{S} = \frac{5}{7} \] - Here, S is the amount after 3 years, which can be expressed as: \[ S = P + \frac{P \cdot R \cdot 3}{100} \] - Substituting S in the ratio gives us: \[ \frac{P}{P + \frac{P \cdot R \cdot 3}{100}} = \frac{5}{7} \] 4. **Cross-Multiplying**: - Cross-multiplying the equation: \[ 7P = 5\left(P + \frac{P \cdot R \cdot 3}{100}\right) \] - Expanding the right side: \[ 7P = 5P + \frac{15PR}{100} \] 5. **Rearranging the Equation**: - Rearranging gives: \[ 7P - 5P = \frac{15PR}{100} \] \[ 2P = \frac{15PR}{100} \] 6. **Dividing by P** (assuming P ≠ 0): - Dividing both sides by P: \[ 2 = \frac{15R}{100} \] 7. **Solving for R**: - Rearranging gives: \[ 15R = 200 \] \[ R = \frac{200}{15} = \frac{40}{3} \approx 13.33 \] 8. **Finding the Rate of Interest**: - The rate of interest per annum is: \[ R \approx 13.33\% \] ### Final Answer: The rate of interest per annum is approximately **13.33%**.
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