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Question : If Rs. 8,500 becomes Rs. 11,050 in 6 years at a certain rate of simple interest, and the rate then becomes 1.8 times higher, what will be the amount after 5 years on the same principal?

Option 1: Rs. 15,625

Option 2: Rs. 14,350

Option 3: Rs. 13,550

Option 4: Rs. 12,325


Team Careers360 12th Jan, 2024
Answer (1)
Team Careers360 21st Jan, 2024

Correct Answer: Rs. 12,325


Solution : Given:
Principal amount = Rs. 8,500
Time = 6 years
Simple interest = 11,050 – 8,500 = 2,550
Let the rate be $r$.
Now, $\frac{\text{(Principal amount × Time × Rate)}}{100}=\text{Simple interest}=2550$
⇒ $\frac{8500×6×r}{100}=2550$
⇒ $r=\frac{2550}{85×6}$
$\therefore ​​​​r=5$%
Now if the rate becomes 1.8 times itself, the amount of the same principal in 5 years will be:
$\frac{\text{(Principal amount × Time × Rate)}}{100}+8500$
= $\frac{8500×5×(5×1.8)}{100}+8500$
= $\frac{8500×5×9}{100}+8500$
= $3825+8500$
= $12325$
Hence, the correct answer is Rs. 12,325.

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