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Simple Interest - Quant/Math - CAT 2009
Question 4 the day:
May 27, 2003
The question for the day is from the topic of Simple Interest.
- A sum of money invested for a certain number of years at 8% p.a. simple interest grows to Rs.180. The same sum of money invested for the same number of years at 4% p.a. simple interest grows to Rs.120 only. For how many years was the sum invested?
| (1) |
25 years |
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(2) |
40 years |
| (3) |
33 years and 4 months |
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(4) |
Cannot be determined |
Correct Answer - (1)
Solution:
From the information provided we know that,
Principal + 8% p.a. interest on principal for n years = 180 …….. (1)
Principal + 4% p.a. interest on principal for n years = 120 ……… (2)
Subtracting equation (2) from equation (1), we get
4% p.a. interest on principal for n years = Rs.60.
Now, we can substitute this value in equation (2),
i.e Principal + 60 = 120
= Principal = Rs.60.
We know that SI =  , where p is the principal, n the number of years and r the rate percent of interest.
In equation (2), p = Rs.60, r = 4% p.a. and the simple interest = Rs.60.
Therefore, 60 = 
=> n = 100/4 = 25 years.
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