Multiple choice

A man deposited Rs. 5000 at the rate of 8% p.a. for 3 years but got the same amount of simple interest in another bank for 2 years. Find the difference in the rates of interest.

  1. 2%

  2. 4%

  3. 6%

  4. 8%

  5. 10%
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

SI = 5000 * 0.08 * 3 = 1200. In the second bank, 1200 = 5000 * r * 2. r = 1200 / 10000 = 0.12 = 12%. Difference = 12% - 8% = 4%.

AI explanation

Using the simple interest formula of principal times rate times time divided by 100, the interest from the first bank is 5000 times 8 times 3 divided by 100, which equals 1200 rupees. For the second bank, the principal is 5000, the time is 2 years, and the interest is 1200 rupees. Solving for the second rate gives 1200 times 100 divided by the product of 5000 and 2, which equals 12 percent. The difference in the rates of interest is 12 percent minus 8 percent, resulting in 4%.

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