Question

A sum of Rs. 400 amounts to Rs. 480 in 4 years. What will it amount to if the rate of interest is increased by 2%?
1. Rs.512
2. Rs.520
3. Rs.484
4. Rs.560

Answer 1

Correct Answer - Option 1 : Rs.512

Given

Principle = 400

Amount = 480

Time = 4 years

Formula used:

SI = (P × R × T) / 100

Calculation:

SI = Amount - Principal

⇒ 480 - 400

⇒ Rs.80

SI for 1 year = 80/4

⇒ Rs.20

⇒ Rate = (SI × 100)/ P × T

⇒ Rate = (20 × 100)/ 400 × 1

⇒ Rate = 5%

∴ New rate = 5% + 2% = 7%

⇒ SI = (400 × 7% × 4)/100

⇒ SI = Rs.112

Amount = Principle + Simple interest

⇒ 400 + 112

⇒ Rs.512