The difference of simple interest from two banks for ₹ 1000 in 2 yr is ₹ 20. Find the difference in rates of interest.

Q: The difference of simple interest from two banks for ₹ 1000 in 2 yr is ₹ 20. Find the difference in rates of interest.

Let the two rates be R1 and R2 According to the question, [(1000 x 2 x R1)/100] - [(1000 x 2 x R2)/100] = 20 ⇒ [2000 x (R1 - R2)] / 100 = 20 ∴ R1 - R2 = 20/20 = 1%

2%
1.5%
1%
2.5%

Correct Answer: 1%

Explanation:

Let the two rates be R₁ and R₂
According to the question,
[(1000 x 2 x R₁)/100] - [(1000 x 2 x R₂)/100] = 20
⇒ [2000 x (R₁ - R₂)] / 100 = 20
∴ R₁ - R₂ = 20/20 = 1%

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