1.

Ajay took a loan from ABC bank at a simple interest rate of 8% in the first year with an increase of 0.5% in each subsequent year. He paid interest of Rs. 4860 after Five years. How much loan did he take?1). Rs. 108002). Rs. 331403). Rs. 155004). Cannot be determined

Answer»

Let’s assume Ajay took a LOAN of Rs. X.

We know the formula for simple Interest,

SI = (P × R × t)/100

Where,

SI = Simple Interest

P = Principal

R = Rate of Interest

t = Time period

Here Rate of interest is varying each year, so we can calculate SI at each year then we will add SI at each year to calculate total SI

SI for First Year,

Rate of Interest = 8%

⇒ SI1 = (X × 8 × 1)/100 = 8X/100

SI for Second Year,

Rate of Interest = 8.5%

⇒ SI2 = (X × 8.5 × 1)/100 = 8.5X/100

Similarly,

SI for third, fourth and fifth years are as follows

⇒ SI= 9X/100

⇒ SI= 9.5X/100

⇒ SI= 10X/100

Total Simple Interest = SI+ SI+ SI+ SI4 + SI5 = 4860 (GIVEN)

⇒ (8X/100) + (8.5X/100) + (9X/100) + (9.5X/100) + (10X/100) = 4860

⇒ 45X/100 = 4860

⇒ X = 486000/45 = Rs. 10800

AMOUNT of loan Ajay took = Rs. 10800


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