A certain sum amounts to ₹17,925 in 3 years and to ₹21,825 in 7 years at the same rate percent per annum at simple interest. What will be the simple interest (in rupees) on a sum of ₹18,500 for 4 (2/5) years at double the earlier rate?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. 10,582.
Given:
A certain sum amounts to ₹17,925 in 3 years
A certain sum amounts to ₹21,825 in 7 years
Formula used:
Simple interest = PRT/100, where
P = principal, R = rate and T = time period
Calculations:
Simple interest in 4 years (7 - 3) = 21825 - 17925 = 3900
For 3 years = (3900/4) × 3 = 2925
Now, Principal = 17925 - 2925 = 15000
Using equation (1), we get
⇒ (15000 × 3 × r)/100 = 2925
⇒ r = 6.5%
Twice the rate = 2r = 13%
Time = 22/5 years
Now, Simple interest = (18500 × 22 × 13)/(100 × 5)
⇒ 10582