Question

A certain sum of money at simple interest amounts to GHC560 in 3 years and to GHC600 in 5 years. Find the principal and the rate of interest.

Answer 1

Interest in 3years =Rs560

Interest in 5 years=Rs600

Interest in 2 years=600-560=40rs

Interest in 1 year =40/2=20rs

Interest in 3 years=20×3=60rs

So principal=560-60=500rs

SI=PRT/100

20=500×R×1/100

2000/500=R

4%=R

Answer 2

Principal is Rs 500 and rate of interest is 4 % per annum

Solution:

Given that,

A certain sum of money at simple interest amounts to 560 in 3 years and to 600 in 5 years

Simple interest for 2 years = 600 - 560 = 40

Then,

Simple interest for 1 year = 20

Sum of money at simple interest amounts to 560 in 3 years

Therefore,

A = 560

SI for 3 years = 20 x 3 = 60

Principal = Amount - SI for 3 years

Principal = 560 - 60

Principal = 500

Find the rate of interest:

The simple interest formula is:

$Simple\ Interest = \frac{p \times n \times r}{100}$

Where,

p is the principal

n is the number of years

r is the rate of interest

Therefore,

$60 = \frac{500 \times r \times 3}{100}\\\\60 = 15r\\\\r = 4$

Thus rate of interest is 4 % per annum

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