In how many years will a sum of Rs 1250 become Rs 1550 at 4% per annum simple interest?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → 6 years
The interest is the amount minus the sum, and simple interest grows by the same amount every year.
Interest \(=1550-1250=300\)
Interest for 1 year \(\displaystyle =\frac{1250\times4}{100}=50\)
Time \(=300\div50=6\) years
The time is 6 years.
Why the other options are incorrect
Option (1) 7 years — Incorrect. In 7 years the interest is \(\displaystyle\frac{1250\times4\times7}{100}=350\), so the sum becomes Rs 1600, not Rs 1550.
Option (3) 5 years — Incorrect. In 5 years the interest is \(\displaystyle\frac{1250\times4\times5}{100}=250\), so the sum becomes Rs 1500, not Rs 1550.
Option (4) 8 years — Incorrect. In 8 years the interest is \(\displaystyle\frac{1250\times4\times8}{100}=400\), so the sum becomes Rs 1650, not Rs 1550.