Peter invested a certain sum of money in a simple interest bond whose value grew to $400 at the end of 4 years and to $ 500 at the end of another 2 years. What was the rate of interest in which he invested his sum?
Pick one
A) 12%
B) 12.5%
C) 67%
D) 25%
E) 33%
Lets assume the Principal Amount (initial amount invested) to be P   rate of interest to beRand time as T. We need to find R   Now After a time of 4years the principal P amounts to $400 and after a time of 6years ( question says after another 6years so 4+2) P becomes $500.   Formulating the above data   Amount (A1) at end of 4years   A1= P(1 + 4R/100) = 400   Amount (A2) at end of 6years   A2 = P(1 + 2R/100) = 500   25%ividing A2 by A1 we get   (1 + 4R/100)/(1 + 2R/100) = 5/4   after cross multiplication we are left with 4R =100 which gives R = 25%   Option: 25%
<result>D</result>
Peter invested a certain sum of money in a simple interest bond whose value grew to $400 at the end of 4 years and to $ 500 at the end of another 2 years. What was the rate of interest in which he invested his sum?