Correct Answer - Option 1 : Rs. 484
Given:
Sum = Rs.400
Amount = Rs.441
Time = 2 years
Formula Used:
For compound interest,
A = P(1 + R/100)n
where,
A = Amount
P = Sum
R = Rate of interest
n = Number of years
Calculation:
A = P(1 + R/100)n
⇒ 441 = 400(1 + R/100)2
⇒ 441/400 = (1 + R/100)2
⇒ √(441/400) = 1 + R/100
⇒ 21/20 = (100 + R)/100
⇒ 21 = (100 + R)/5
⇒ 105 = 100 + R
⇒ R = 105 – 100
⇒ R = 5%
Now the rate of interest increased by 5%
⇒ Total rate of interest = 5% + 5%
⇒ Total rate of interest = 10%
A = P(1 + R/100)n
⇒ A = 400 (1 + 10/100)2
⇒ A = 400 (1 + 1/10)2
⇒ A = 400 (11/10)2
⇒ A = 400 × 11/10 × 11/10
⇒ A = 4 × 11 × 11
⇒ A = 484
∴ Amount received is Rs.484