Multiple choice

₹ 4,300 becomes ₹ 4,644 in 2 years at simple interest. Find the principle amount that will become ₹ 10,104 in 5 years at the same rate of interest.

  1. ₹ 7,200

  2. ₹ 8,420

  3. ₹ 9,260

  4. ₹ 5,710
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B Correct answer
Explanation

For the first investment: Principal = ₹4,300, Amount = ₹4,644, Time = 2 years. Simple Interest = 4,644 - 4,300 = ₹344. Rate r = (SI × 100) ÷ (P × T) = (344 × 100) ÷ (4,300 × 2) = 34,400 ÷ 8,600 = 4% per annum. For the second case: Let new principal be P, Amount = ₹10,104, Time = 5 years, Rate = 4%. SI = Amount - P = 10,104 - P. Using SI = (P × R × T) ÷ 100: 10,104 - P = (P × 4 × 5) ÷ 100 = 20P ÷ 100 = 0.2P. So 10,104 = P + 0.2P = 1.2P. Therefore P = 10,104 ÷ 1.2 = ₹8,420.

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