Question : A person deposited Rs. 500 for 4 years and Rs. 600 for 3 years at the same rate of simple interest in a bank. Altogether he received Rs. 190 as interest. The rate of simple interest per annum was:
Option 1: 4%
Option 2: 5%
Option 3: 2%
Option 4: 3%
Correct Answer: 5%
Solution :
The formula for simple interest is $SI=\frac{P×R×T}{100}$, where $SI$ is the interest, $P$ is the principal amount, $R$ is the rate of interest, and $T$ is the time in years.
Given that a person deposited Rs. 500 for 4 years and Rs. 600 for 3 years and received Rs. 190 as interest altogether.
So, $\frac{500×4×R}{100}+\frac{600×3×R}{100}=190$
$⇒20R+18R=190$
$⇒38R=190$
$⇒R=5$%
Hence, the correct answer is 5%.
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