500 was invested at 12% per annum simple interest and a certain sum of money invested at 10% per annum simple interest. If the sum of the interest on both the sum after 4 years is 480, the latter sum of money is ?450 750 600 550
Question
500 was invested at 12% per annum simple interest and a certain sum of money invested at 10% per annum simple interest. If the sum of the interest on both the sum after 4 years is 480, the latter sum of money is ?450 750 600 550
Solution
To solve this problem, we need to use the formula for simple interest which is I = PRT/100, where I is the interest, P is the principal amount (the initial amount of money), R is the rate of interest, and T is the time in years.
First, let's calculate the interest earned from the $500 investment at 12% per annum for 4 years.
I = (500 * 12 * 4) / 100 = $240
According to the problem, the total interest from both investments after 4 years is 480 - 240.
Let's denote the unknown sum of money (the principal of the second investment) as P. The rate for the second investment is 10% per annum. We can set up the following equation to find P:
240 = (P * 10 * 4) / 100
Solving for P gives us P = $600.
So, the latter sum of money is $600.
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