The sum of ₹500 becomes ₹600 in 2 years at certain rate of simple interest. If the rate of interest is halved, then what amount will ₹500 give in 2 years?
Answer & explanation
Correct answer: option 4
Given :-
Interest of 2 years = 600 - 500 = 100
Interest of 1 year = \(\frac{100 }{2 }\) = 50
By using formula :-
Simple Interest = \(\frac{Principal ×Rate × Time }{100}\)
50 = \(\frac{500 × Rate × 1}{100}\)
Rate = 10%
If rate is halved . New rate = \(\frac{10 }{2 }\) = 5%
SI = \(\frac{500 × 5 × 2}{100}\) = 50
Amount = Principal + Simple Interest
= 500 + 50
= Rs. 550