Ananyaa invests an amount of Rs. 9534 at the rate of 4% per annum to obtain a total amount of Rs. 11442 on simple interest after a certain period. Find the number of years that Ananyaa had to invest the amount to obtain the total sum of Rs. 11442?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → 5 years
In simple interest the interest is the same every year, \(\frac{P\times R}{100}\), because it is always worked out on the original amount. So the number of years is the total interest divided by one year’s interest.
Total interest earned (amount minus principal): \(11442-9534=1908\)
Interest for one year at 4%: \(\displaystyle \frac{9534\times4}{100}=381.36\)
Number of years: \(\displaystyle \frac{1908}{381.36}\approx5.003\), that is, 5 years