Question

Rohan took a loan at a Simple interest of 5% in the first year and that keeps increasing by 1% every year. If he pays Rs. 2160 as interest after 3 years, then find the loan amount.
1. Rs. 11,000
2. Rs. 12,000 
3. Rs. 14,000 
4. Rs. 10,000 
5. Rs. 9,000 

Answer 1

Correct Answer - Option 2 : Rs. 12,000 

Given:

Time period = 3 years

interest amount = Rs. 2160

Calculation:

let the loan amount be Rs. x

We know first year interest is 5% and that keeps increasing by 1% by every passing year

Total interest earned = 5% + 6% + 7% = 18%

So, according to the question 

18% of x = Rs. 2,160

⇒ x = (2160 × 100)/18

⇒ Rs. 12,000

∴ The loan amount was Rs. 12,000