Multiple choice

Directions: Answer the question independently. Given that the total interest paid over 25 years is 100% more than the borrowed principal 'P' at a certain rate of simple interest r. At the same rate of simple interest r, the total interest paid over n years is 200% more than the borrowed principal '2P'. What is the ratio of the total interest paid on a sum of money '4P' at the same rate of simple interest 'r' over (50 - n) years to the borrowed principal '4P'?

  1. 1 : 1

  2. 3 : 2

  3. 4 : 3

  4. 4 : 5

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A Correct answer
AI explanation

Using the simple interest formula, the interest on principal P for 25 years is 2P, so 2P = (P * r * 25) / 100, which means the rate r is 8%. For the second case, the interest is 200% more than principal 2P, making the interest equal to 6P; using the formula again gives 6P = (2P * 8 * n) / 100, so n equals 37.5 years. The duration (50 - n) is 12.5 years, and calculating the interest on principal 4P gives SI = (4P * 8 * 12.5) / 100 = 4P. The ratio of this interest to the principal 4P is 4P to 4P, which simplifies to 1 : 1.