Question

A sum of rs. 900 amounts to rs. 950 in 3 years at simple interest. if the interest rate is increased by 4%, it would amount to how much?

Answer 1

you can solve this question by the help help of formulas of SP and CP

Answer 2

Amount would be Rs.1058 when interest rate is increased by 4%.

Solution:

The principal of the transaction is Rs. 900 and the amount of the transaction is Rs. 950, for 3 years which means the simple interest is

950 – 900 = Rs. 50.

To find out the old interest rate we use the formula

$\begin{array}{l}{\text { Simple Interest }=\frac{P R T}{100}} \\ \\{50=\frac{900 \times R \times 3}{100}} \\ \\{R=1.85}\end{array}$

Now the new rate is increased by 4%. Therefore, the new rate% = 4 + 1.85 = 5.85%

Hence, the new Amount will be $S . I .=\frac{P R T}{100}=\frac{900 \times 5.85 \times 3}{100}=R s 158$

Therefore, the new amount of the increased rate is 900 + 158 = Rs. 1058.