On a simple interest, Rs. 708 becomes Rs. 944 in four years. If the rate of interest is increased by 5%, then Rs. 675 will become how much in 4 years?
Answer & explanation
Correct answer: option 3
Simple interest in 4 years = 944 - 708 = 236
Simple interest in 1 years = \(\frac{236 }{4 }\) = 59
Simple Interest = \(\frac{Principal ×Rate × Time }{100}\)
Amount = Principal + Simple interest
59 = \(\frac{708 ×Rate × 1 }{100}\)
Rate = \(\frac{59 × 100 }{708 × 1 }\)
= \(\frac{25 }{3 }\)%
New rate = \(\frac{25 }{3 }\)% + 5% = \(\frac{40 }{3 }\)%
Now ,
Sum2 = Rs. 675 , Time = 4 years
Simple Interest = \(\frac{675 ×40 × 4 }{100×3 }\)
= \(\frac{27 ×40 }{3 }\)
= 360
So , New amount after 4 years= 675 + 360
= Rs. 1035