At a simple interest Rs.850 becomes Rs.1250 in 5 years. If the interest rate is increased by 5%, how much would Rs.850 become in 4 years?
Answer & explanation
Correct answer: option 1
S.I. in 5 years = ₨.1250 - ₨.850
= ₨.400
S.I, in 1 year = \(\frac{400}{5}\)
= ₨. 80
rate = \(\frac{80}{850}\) x 100
= 9.4 %
Now the rate is increased by 5% = 14.4%
Amount = P + \(\frac{P\;×\;R\;×\;T}{100}\)
= 850 + \(\frac{850\;×\;14.4\;×\;4}{100}\)
= 850 + 489.5
= 1339.6 or 1340