A bank lent $4000 to Jack at a certain rate of simple interest and $5000 to Kate at a rate which is 0.5% more than that of Jack. After two years, the bank received $860 as interest from both of them. Find the rate of interest per annum at which the amount was lent to Kate?

Correct answer marked below

4.5%

5.5%

Correct

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Explanation

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Official Explanation

Official

Because it's simple interest over 2 years,

\frac{860}{2} = 430

will be the interest that the bank earns in one year.

Let Jack's interest rate be

x\%

per annum. Then Kate's interest rate is

(x + 0.5)\%

per annum.

Total annual interest from both:…

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