Multiple choice

Rs 5000 amounts to Rs 6920 in 4 years at a certain rate of interest. If the rate becomes 1.5 times to itself, the amount of the same principal in 5 years will be:

  1. Rs 6000

  2. Rs 7000

  3. Rs 8600

  4. Rs 9000

Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Using compound interest formula: A = P(1 + r)^t. From 5000 to 6920 in 4 years: 6920/5000 = (1 + r)^4, so 1.384 = (1 + r)^4, giving r ≈ 0.084 or 8.4% annually. At 1.5 times rate = 12.6% for 5 years: 5000(1.126)^5 = 5000 × 1.805 = Rs 9025. This doesn't match. Using simple interest: (6920-5000)/(5000×4) = 1920/20000 = 9.6%. At 1.5× = 14.4% for 5 years: 5000 + 5000×0.144×5 = 5000 + 3600 = Rs 8600.