Word Problem 9

Problem 9: If a man finds that increase in interest rate from 4-7/8 to 5-1/8 percent per annum on his investment increases his income by Rs 25. What is his invested amount?

a) 10000                   b) 12000                c) 15000              d) 20000



Solution:

This is basically problem of simple interest.

We suppose

Investment = x Rs

But it is given that  1st Simple Interest ( SI)

SI= \frac{4\frac{7}{8}}{100} \times x

\Rightarrow SI = \frac{39}{800}x

And 2nd SI;

SI2= \frac{5\frac {1}{8}}{100}x

\Rightarrow SI2 = \frac{41}{800}\times x

We take difference of both simple interests;

Difference = SI - SI2

\Rightarrow Difference =\frac{41}{800}x- \frac{39}{800}x

\Rightarrow Difference =\frac{2}{800}x

But this difference should be equal to increase in income i-e Difference = 25RS, so;

\Rightarrow 25 =\frac{2}{800}x

Keep ‘x’ on one side and shift remaining term to other side;

x= 25 \times \frac{800}{2}

x= 25 \times 400 = 10000

x= 10000 Rs

So invested amount was RS 10000