Question

Salary of a school teacher increases by 25% every year. His salary in the year of 2005 was ₹20,000. What was his salary in 2003?

• A. ₹10,000
• B. ₹12,800
• C. ₹16,000
• D. ₹8000

Answer 1

The correct option is B ₹12,800

Assume salary of school teacher in 2003 was $₹x.$

Given, his salary increase by 25% every year.
$\therefore$His salary in 2004 $=x+\left(25\%\text{of}x\right)$
$⟹x+(x\times \frac{25}{100})=x+\frac{x}{4}=\frac{5x}{4}$
And his salary in 2005 $=\frac{5x}{4}+\left(25\%\text{of}\frac{5x}{4}\right)$
$⟹\frac{5x}{4}+(\frac{5x}{4}\times \frac{25}{100})=\frac{5x}{4}+\frac{5x}{16}=\frac{25x}{16}$

As given his salary in 2005 was ₹20,000.
$\therefore \frac{25x}{16}=20000⟹x=800\times 16=12800$

Hence, option 'b' is correct.