Question
A person lent a sum at simple interest for 6 years. If
the rate had been 5% more, he would have earned Rs. 750 extra. What was the principal?Solution
Let initial rate of interest be r% per annum.
Let the principal be Rs. P
According to question;
P × (r + 5)/100 × 6 – P × r/100 × 6 = 750
Or, P(r + 5) – Pr = 750 × 100/6 = 12500
Or, 5P = 12500
So, P = 12500/5 = Rs. 2500
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