a sum of money lent on simple interest becomes 6 by 5 of itself in 5 years find the rate of simple interest per annum
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Answer:
4 per cent per year
Step-by-step explanation:
P = initial amount
R = rate of interest per cent per year
T = time period in years
A = final amount at the end of period T
SI = Simple Interest = (P*R*T)/100
A = P + SI
Given:
T = 5
=> SI = (P*R*5)/100 = 5PR/100
A = P + (5PR)/100 ..........(i)
But, we are given that
A = (6/5)*P ...........(ii)
Equating the two identities of A, we get:
=> (6/5)*P = P + (5PR)/100
=> (6/5) = 1 + (5R/100)
=> 6/5 = (100 + 5R)/100
=> 6*100 = 5*(100 + 5R)
=> 600 = 500 + 25R
=> 25R = 100
=> R = 4
The required rate of interest is 4 per cent per year
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