Rs 8800 becomes Rs 12000 at a certain rate of simple interest in 4 years. If the rate of interest were 3% more, what would the amount be at the end of 7 years?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Rs 16248
Simple interest is \(\displaystyle \mathrm{SI}=\frac{P\times R\times T}{100}\). The first situation gives the rate; the new rate is 3% more, and the amount is the principal plus the new interest.
Interest in 4 years \(=12000-8800=\) Rs 3200
Rate \(\displaystyle =\frac{3200\times100}{8800\times4}=\frac{100}{11}\%\)
New rate \(\displaystyle =\frac{100}{11}+3=\frac{133}{11}\%\)
Interest in 7 years at the new rate \(\displaystyle =\frac{8800\times133\times7}{11\times100}=8\times133\times7=\) Rs 7448
Amount \(=8800+7448=\) Rs 16248
The amount at the end of 7 years would be Rs 16248.