Question : In what time will INR 10,000 at 4% per annum, produce the same interest as INR 8,000 does in 4 years at 5% Simple Interest?
Option 1: 5 years
Option 2: 3 years
Option 3: 4 years
Option 4: 6 years
Correct Answer: 4 years
Solution :
We have,
Interest produced at INR 8,000 in 4 years at 5%.
Simple interest = $\frac{\text{Principal × Rate × Time}}{100}$
$SI = \frac{8000×5×4}{100} = 1600$
The same interest is produced at INR 10,000 at 4% per annum in $T$ years.
$1600 = \frac{10000×4×T}{100}$
⇒ $T = \frac{1600×100}{10000 \times4} = 4$ years
Hence, the correct answer is 4 years.
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