Question 64

A certain sum was invested on simple interest. The amount to which it had grown in five years was $$1\frac{1}{4}$$ times the amount to which it had grown in three years. The percentage rate of interest was:

Solution

Let the principal be Rs 100 and Rate be X %

Net effective rate after 3 years = $$3\times x %$$

Net effective rate after 5 years = $$5\times x %$$

According to the question,

$$\frac{5}{4}(100 + 3x) = (100 + 5x)$$

500 + 15x = 400 + 20x

5x = 100

x = 20

Required rate = 20 %

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