Multiple choice

SBI lent Rs. 10,000 to Deepak @7% SI for 10 years. Meanwhile, the government implemented a scheme due to which interest rate reduced by 2%. By this Deepak paid Rs.16,000 in total. Then after how many years after Deepak took the loan, the government introduced the scheme?

  1. 3 Years

  2. 4 Years

  3. 5 years

  4. 6 years

  5. Cannot be determined
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Let x be the number of years before the scheme was introduced. The interest for the first x years is (10000 * 7 * x) / 100 = 700x. For the remaining (10-x) years, the rate is 5%, so interest is (10000 * 5 * (10-x)) / 100 = 500(10-x). Total amount = Principal + Interest = 10000 + 700x + 5000 - 500x = 16000. Solving 15000 + 200x = 16000 gives 200x = 1000, so x = 5.

AI explanation

The total interest paid by Deepak is 16000 minus 10000, which equals 6000. If the new reduced interest rate of 5 percent was applied for the remaining years at 5 percent, the total interest formula yields that the original 7 percent rate was used for 5 years. This is verified by checking that the interest for 5 years at 7 percent plus 5 years at 5 percent equals 3500 plus 2500, totaling 6000.

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