Aman invested money at a certain rate of simple interest for a period of four years. Had he invested the same sum for a period of six years the total interest earned by him would have been fifty percent more than the earlier interest amount. What was the rate of interest per cent per annum?
Solution
Correct Answer: Option E
Formula: SI = (P × r × t)/100
Where, SI = Simple interest, P = principal amount, r = rate%, t = time in years
Given, Aman invested money at a certain rate of simple interest for a period of four years.
∴ SI = (P × r × 4)/100 = Pr/25
If he had invested the same amount for 6 years,
SI = (P × r × 6)/100 = 3Pr/50
We observe that \(\frac{{3pr}}{{50}} = \frac{{pr}}{{25}} + 50\% \;of\frac{{pr}}{{25}}\)
Hence, this is an identity.
In other words, for any values of P and r, the interest earned after 6 years will be 50% more than the interest earned after 4 years.
∴ rate of interest or principal amount cannot be determined with the given information
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