Question

In how many years will Rs. 500 invested at the rate of 37.5% simple interest per annum amounts to Rs. 4,000?
1. 16.77 years
2. 21.66 years
3. 18.67 years
4. 14.76 years

Answer 1

Correct Answer - Option 3 : 18.67 years

Given:

Principle = Rs.500

Rate = 37.5%

Amount = Rs. 4,000

Formula Used;

Interest = Amount – Principle 

Simple Interest = (P × T × R)/100, where

P = Principle

T = Number of years

R = Rate

Calculation:

Interest = Amount – Principle

Interest = 4,000 – 500

⇒ Interest = 3,500

Simple Interest = (P × T × R)/100

⇒ 3,500 = (500 × T × 37.5)/100

⇒ T = (3,500 × 100)/(500 × 37.5)

⇒ T = 18.67 years

∴ Number of years required is 18.67 years.