Question
A sum of money was lent at simple interest for 5 years.
If the rate had been 6% more, the interest would have been Rs. 900 higher. What was the amount lent?Solution
Let initial rate of interest be r% per annum.
Let the principal be Rs. P
According to question;
P × (r + 6)/100 × 5 – P × r/100 × 5 = 900
Or, P(r + 6) – Pr = 900 × 100/5 = 18000
Or, 6P = 18000
So, P = 18000/6 = Rs. 3000
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