The difference between the interests received from two different banks on Rs.500 for 2 years is Rs.25. Find the difference between rates?Options2.50%3.60%None of these4.40%3.50%
Question
The difference between the interests received from two different banks on Rs.500 for 2 years is Rs.25. Find the difference between rates?Options2.50%3.60%None of these4.40%3.50%
Solution
The difference in interest received from two different banks on Rs.500 for 2 years is Rs.25. This means that the difference in the interest rates of the two banks is responsible for this Rs.25 difference.
Interest is calculated using the formula:
Interest = Principal * Rate * Time
In this case, the principal is Rs.500 and the time is 2 years. The difference in interest is Rs.25. We can set up the equation as follows:
25 = 500 * (Rate2 - Rate1) * 2
Solving for (Rate2 - Rate1), we get:
(Rate2 - Rate1) = 25 / (500 * 2)
(Rate2 - Rate1) = 25 / 1000
(Rate2 - Rate1) = 0.025
So, the difference in rates is 0.025, or 2.5%.
Therefore, the correct option is 2.50%.
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