Multiple choice

The difference between the interest received by Anil and Ravi is Rs 120. When they invest Rs 2000 each for 3 years what is the difference in the rate of interest?

  1. 2%

  2. 7%

  3. 4%

  4. 6%
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A Correct answer
Explanation

Let the rates be r1 and r2 for Anil and Ravi respectively. Interest for 3 years at simple interest: I = P × r × t / 100. Difference in interest = 2000 × r1 × 3 / 100 - 2000 × r2 × 3 / 100 = 120. Simplifying: 2000 × 3 × (r1 - r2) / 100 = 120. So 60 × (r1 - r2) = 120, giving (r1 - r2) = 2%. The difference in rates is 2%.

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