In how much time will ₹5,000 at 4% per annum simple interest produce the same interest as ₹8,000 in 2 1/2 years at 8% per annum simple interest?

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Accepted Answer

Step 1: Calculate the interest earned by ₹8,000 at 8% per annum for 2.5 years.
Interest = (Principal × Rate × Time) / 100
= (8000 × 8 × 2.5) / 100
= (8000 × 20) / 100
= 1600

Step 2: Let the time required for ₹5,000 at 4% per annum to earn the same interest be t years.
Interest = (5000 × 4 × t) / 100 = 200t / 100 = 20t

Step 3: Set the interests equal:
20t = 1600
=> t = 1600 / 20 = 8 years

Therefore, ₹5,000 at 4% per annum will produce the same interest in 8 years.

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