Question 60

What will be the ratio of the simple interest on ₹1,000 for 2 years at 5% per annum to the simple interest on the same sum for the same period at 10% per annum?

Solution

simple interest = $$\frac{principal\times\ rate\times\ time}{100}$$

From the above-given formula, we know that simple interest depends on three things which are principal, rate of interest and time.

As per the information given in the question, the principal and time are the same in both of cases. Only the rate of interest will be changed. So the ratio of the rate of the interest will be the ratio of simple interest.

Ratio = 5% : 10%

= 1 : 2


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