Multiple choice

A sum amounts to Rs. 14,395.20 at 9.25% p.a. simple interest in 5.4 years. What will be the simple interest on the same sum at 8.6% p.a. in 4.5 years?

  1. Rs. 3,715.20

  2. Rs. 3,627

  3. Rs. 3,797.76

  4. Rs. 3,672
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The total interest rate factor for the first period is 9.25% * 5.4 = 49.95%, meaning the amount is 149.95% of the principal. Solving 1.4995 * P = 14,395.20 gives a principal of Rs. 9,600, and the simple interest on this principal at 8.6% for 4.5 years is 9,600 * 0.086 * 4.5 = Rs. 3,715.20.

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