Question 97

The Simple Interest on some amount of money for 2 years is Rs.400. If 'r' is 4% more, then the Simple Interest will be Rs.400 more. What is the original amount of money?

Solution

Simple Interest (s) = Rs.400

Time (n) = 2 years

Principal (P) and Rate (r)

s = 400 = $$ \frac{P \times 2 \times \ r}{100} $$

s' = 400 + 400 = 800 = $$ \frac{P \times 2 \times \ (r + 4) }{100} $$

Comparing LHS, 2s = s'.

i.e r + 4 = 2r

r = 4

P = $$ \frac{400 \times 100} {2 \times 4} $$ = Rs. 5000

Therefore, Option A is correct.

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