Question

Ravi took a loan of Rs. 1 Lakh from SBI at the rate of $6\%$ per annum of simple interest for 10 years. After some time, the rate of interest dropped sown to $4\%$ and as a result Ravi paid only Rs. 1.48 lakhs at the end of the loan period. Find out the after how many years the rate of interest was decreased to $4\%$ ?

• A. 3 years
• B. 4 years
• C. 5 years
• D. 6 years
• E. 7 years

Answer 1

The correct option is B 4 years

Interest paid by Ravi on the amount of 1 Lakh = Rs. 48000

Try answer options:

$a):(100000)\frac{\{3\times 6+7\times 4\}}{100}\ne 48000$

$b):(100000)\frac{\{4\times 6+6\times 4\}}{100}=48000$

Hence option (b)

Alternatively: - He paid Rs. 48,000 interest in 10 years.

$\frac{48,000}{1,00,000}\times 100=48\%$ in 10 years. So, $4.8\%$ in a year.

after 4 years the rate of interest was decreased to $4\%$