Question
An initial investment of Rs. x, when placed in an
account offering r% per annum as simple interest over a period of 16 years, grows to five times its original value. If an additional Rs. 240 is added to this principal (making it Rs. x + 240) and then invested at an interest rate of r + 25% per annum compounded annually for two years, the resulting balance is Rs. 6480. Determine the value of 'x'.Solution
According to the question, (x × 16 × r)/100 = 5x – x Or, r = 400/16 = 25 Therefore, (r + 25)% = 50% Or, (x + 240)(1 + 50/100)2 = 6480 Or, 2.25(x + 240) = 6480 Or, x + 240 = 2880 Or, x = 2640
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