A sum of ₹2,432 amounts to ₹2,681.28 in 2 years at a certain rate per cent per annum, interest compounded yearly. What will be the simple interest (in ₹) on the same sum for 4(3/8)years at double the rate?
Answer & explanation
Correct answer: option 3
The Formula that we used here is -
Amount = P$(1 \;+\; \frac{R}{100})^t$
2681.28 = 2432 [ 1 + \(\frac{R}{100}\) ]²
\(\frac{2681.28}{2432}\) = [ 1 + \(\frac{R}{100}\) ]²
\(\frac{441}{400}\) = [ 1 + \(\frac{R}{100}\) ]²
(\(\frac{21}{20}\))² = [ 1 + \(\frac{R}{100}\) ]²
On solving ,
R = 5%
Double the rate = 10%
Now, Simple interest for 4(3/8) years = \(\frac{2432 ×10× 35 }{100 ×8}\)
= \(\frac{2432 × 35 }{10 ×8}\)
= Rs. 1064