Question
An amount was invested at simple interest for 2 years.
If the rate had been 8% higher, the interest would have increased by Rs. 320. What is the principal amount?Solution
Let initial rate of interest be r% per annum.
Let the principal be Rs. P
According to question;
P × (r + 8)/100 × 2 – P × r/100 × 2 = 320
Or, P(r + 8) – Pr = 320 × 100/2 = 16000
Or, 8P = 16000
So, P = 16000/8 = Rs. 2000
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