If ₹64 amounts to ₹83.20 in 2 years on simple interest, then how much will ₹86 amount to in 4 years at the same rate percent per annum?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → ₹137.60
Under simple interest the interest is the same every year, so it is proportional to the principal and the time: \(\text{SI}=\frac{P\times R\times T}{100}\). The rate is found from the first sum and used for the second.
The rate (from ₹64 for 2 years):
Interest \(=83.20-64=19.20\)
\(\displaystyle R=\frac{19.20\times100}{64\times2}=15\%\) per annum
The amount of ₹86 for 4 years at 15%:
Interest \(\displaystyle =\frac{86\times15\times4}{100}=51.60\)
Amount \(=86+51.60=137.60\)