A sum becomes Rs. 11,760 in 6 years at r% simple interest. If the interest rate had been (r + 5)% p.a., the amount would have been Rs. 13,320. Find the principal.
Show answer & explanation
Correct answer: A
Explanation
Given:
Amount after 6 years = 11,760 (Rate = r%)
Amount after 6 years = 13,320 (Rate = r + 5%)
According to the formula:
A = P(1 + RT/100)
11,760 = P(1 + 6r/100) ...(1)
13,320 = P(1 + 6(r + 5)/100) ...(2)
(2) − (1)
13,320 − 11,760 = P[6(r+5)/100 − 6r/100]
1,560 = P(30/100)
1,560 = 0.3P
P = 1,560 / 0.3
= 5,200