Multiple choice

The yearly income of a money lender decreases by Rs. 54 due to fall in the annual rate of interest from 9% to 7%. Find his capital.

  1. Rs. 2900

  2. Rs. 5400

  3. Rs. 2100

  4. Rs. 2700

  5. None of these
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The difference in interest rates is 9% - 7% = 2%. This 2% of the capital equals 54. So, 0.02 * P = 54, which means P = 54 / 0.02 = 2700.

AI explanation

Let the money lender's capital be P, and the decrease in his yearly income is the difference in the interest earned at the two rates. Using the simple interest formula for one year, we write the equation as (P x 9) / 100 minus (P x 7) / 100 equals 54. Solving (P x 2) / 100 = 54 gives 2P = 5400, so the capital is Rs. 2,700.

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