Question

₹800 becomes ₹956 in 3 years at a certain rate of simple interest. If the rate of interest is increased by 4%, what will ₹ 800 amount to in 3 years:

• A. ₹1,020.80
• B. ₹1,025
• C. ₹1,052
• D. ₹1,050

Answer 1

The Correct Option is C

To solve the problem, we need to calculate the amount accrued over 3 years using simple interest formula and then adjust the interest rate to find the new amount with the increased rate. The formula for simple interest is:

Simple Interest (SI) = (Principal × Rate × Time) / 100

Firstly, determine the original rate using the given information. The principal is ₹800, and the amount after 3 years is ₹956:

1. Amount at ₹956 = Principal + Simple Interest = ₹800 + SI

2. Calculate original SI: SI = ₹956 - ₹800 = ₹156

3. Use the SI formula to find the original rate: ₹156 = (₹800 × R × 3) / 100

4. Solving the equation for R: R = (₹156 × 100) / (₹800 × 3)

5. R = 6.5%

 

Next, calculate the amount with the increased rate (6.5% + 4% = 10.5%):

1. New Rate = 10.5%

2. Calculate new SI with increased rate: SI = (₹800 × 10.5 × 3) / 100

3. SI = (₹800 × 10.5 × 3) / 100

4. SI = ₹252

5. New Amount = Principal + New SI = ₹800 + ₹252 = ₹1052

Hence, the amount becomes ₹1,052 when the rate of interest is increased by 4%.

The correct option is ₹1,052.