Question

If the annual rate of interest increases from 10% to 12.5%,a man's yearly income increses by 1250.find his principle

Answer 1

Let the man's principle be P
then total income=P+10P/100
=1.1P
When interest rate is 12.5%
then total income=P+12.5P/100
=1.125P
Now
increase in income=final income-initial income
=>1.125P-1.1P=1250
=>0.025P=1250
=>P=1250/0.025
=>P=50,000
Ans
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