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Arithmetic Ability
Simple Interest

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Q.

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?

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Correct choice: A

Explanation:

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 =(60*n*4)/100 => n = 100/4 = 25 years.
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