Multiple choice

Rs. 4300 becomes Rs. 4644 in 2 years at simple interest. Find the principle amount that will become Rs. 10104 in 5 years at the same rate of interest.

  1. 7200

  2. 8420

  3. 9260

  4. 5710
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

SI = P × r × t. 4644 - 4300 = 344 = 4300 × r × 2, so r = 4%. Now find P for amount 10104 in 5 years: 10104 = P(1 + 0.04 × 5) = 1.2P. Therefore P = 10104/1.2 = 8420.

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