The rate of simple interest of a bank increased from 10.5% to 18% and time duration is also increased from 4.5 years to 7 years. The total simple interest was increased by Rs. 1890. Find the increased simple interest.
Answer & explanation
Correct answer: option 3
Let principal be P;
S.I. @ 10.5% in 4.5 years = \(\frac{P\;×\;10.5\;×\;4.5}{100}\) ---(i)
S.I. @ 18% in 7 years = \(\frac{P\;×\;18\;×\;7}{100}\) ---(ii)
Given, that increase in S.I. is ₨.1250,
(Subtracting eq. (i) from (ii))
⇒ 1890 = \(\frac{P\;×\;18\;×\;7}{100}\) - \(\frac{P\;×\;10.5\;×\;4.5}{100}\)
⇒ 1890 = \(\frac{9P}{100}\) [14 - \(\frac{21}{4}\)]
⇒ 1890 = \(\frac{9P}{100}\) [\(\frac{35}{4}\)]
⇒ P = \(\frac{1890\;×\;100\;×\;4}{9\;×\;35}\)
⇒ P = ₨.2400
So, Increased Simple Interest = \(\frac{2400\;×\;18\;×\;7}{100}\) = ₨.3024