Question

2) A sum of ₹ 600 amounts to ₹ 720 in 4 years at same rate of interest per annum . In how
much time ₹ 800 amounts to ₹ 1020 with the same rate of interest.

Answer 1

Answer:Assuming Simple Interest first.

Let r be the original rate of Interest.

Principal + S.I. = Amount

i.e. 600 + 600 * 4 * r / 100 = 720

i.e. 600 + 24r + 720

i.e. 24r = 120

i.e. r = 5

So, Original rate of Interest is 5% p.a.

Now, with increase in 2% in the rate of Interest, we have,

Amount = Principal + S.I.

Amount = 600 + 600 * 4 * 7/100

Amount = 600 + 168

Amount = 768

So, if we assume Simple Interest, it will Amount to Rs. 768/- if the rate of Interest is increased by 2%.

Now, assuming Compound Interest.

Let r be the original rate of Interest.

720 = 600 * (1 + r/100)^4

1.2 = (1 + r/100)^4

Taking 4th root, on both sides, we have,

1.0466 = 1 + r/100

i.e. r = 4.66%

At 2% increased rate of Interest,

Amount = 600 * (1 + 6.66/100)^4

Amount = 600 * 1.0666^4

Amount = 600 * 1.2942

Amount = 776.52

So, if we assume Compound Interest, it will Amount to Rs. 776.52 if the rate of Interest is increased by 2%.

Step-by-step explanation: