A sum of ₹4,000 amounts to ₹5,008 in three years at simple interest at the rate of x% per annum. If the interest rate becomes(x + 2.6)%, then the revised maturity amount will be:
Answer & explanation
Correct answer: option 1
Amount = Principal + interest
5008 = 4000 + interest
Simple Interest of 3 years = 5008 - 4000 = 1008
Simple interest of 1 year = \(\frac{1008}{3}\) = 336
Simple Interest = \(\frac{Principal ×Rate × Time }{100}\)
336 = \(\frac{4000 × x × 1 }{100}\)
x = 8.4%
New rate = ( x + 2.6 )% = ( 8.4 + 2.6 )% = 11%
Simple interest = \(\frac{4000 × 11 × 3}{100}\)
= 1320
New maturity amount = 4000 + 1320 = Rs. 5320