Ram gets Rs. 2600 for Rs. 2000 in 5 years at some rate of simple interest. Had he invested in other places where rate of simple interest is 3% more than current rate, how much would have Ram got in same time?
Answer & explanation
Correct answer: option 1
According to the question:
Simple interest for 5 years = 2600 - 2000 = 600
Simple interest for 1 year = 120
ROI = \(\frac{120 }{ 2000}\) x 100 = 6%
If he had invested in other places with interest rate 3% more i.e. at 9%
Formulae for SI = \(\frac{\text{P Χ R Χ T} }{ 100}\)
Putting the values in the formulae:
SI = \(\frac{\text{2000 Χ 9 Χ 5} }{ 100}\)
SI = \(\frac{\text{90000} }{ 100}\)
SI = 900
The amount which he would have received at the end of 5th year if he had invested at other places with rate of interest 3% higher - Rs. 2900 ( 2000 + 900)