The interest rate in a bank is incresed by one percentage point, which transkated into a 20% increse in the interest that a person recived. What was the original rate of interest in that bank?

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Solution

Let the original rate of interest be R% and principal = P, then $S I = \frac{P \times R \times 1}{100}$

Also,
SI + 20% of SI = $\frac{P \times (R + 1) \times 1}{100}$
⇒ 20% of SI = $\frac{P \times 1 \times 1}{100}$
⇒ 100% of SI = $\frac{P \times 1 \times 1}{100}$
⇒ SI = $\frac{P \times 5 \times 1}{100}$
Hence, R = 5.

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The interest rate in a bank is incresed by one percentage point, which transkated into a 20% increse in the interest that a person recived. What was the original rate of interest in that bank?

Let the original rate of interest be R% and principal = P, thenSI=P×R×1100 Also, SI + 20% of SI =P×(R+1)×1100 ⇒ 20% of SI =P×1×1100 ⇒ 100% of SI = P×1×1100 ⇒ SI = P×5×1100 Hence, R = 5.