Question

What sum of money should be invested for $5$ years at $8\%$ p.a. to earn the same interest as $Rs.3600$ at $10\%$ p.a. for $4$ years.

Answer 1

Simple Interest, $SI=\frac{P\times R\times T}{100}$

For the first case:

Principle Amount, $P=Rs.3600$

Rate of Interest, $R=10\%$

Time, $T=4$ years.

Simple Interest, $SI=?$

So:

$SI=\frac{P\times R\times T)}{100}$

$SI=\frac{(3600\times 10\times 4)}{100}$

$SI=Rs.1440.$

So the Simple Interest of the first case will be the Simple Interest of the second case.

Then:

Principle Amount, $P=?$

Rate of Interest, $R=8\%$

Time, $T=5$ years

$S.I=Rs.1440$

So:

$SI=\frac{(P\times R\times T)}{100}$

$1440=\frac{(P\times 8\times 5)}{100}$

$40P=144000$

$P=\frac{144000}{40}=Rs.3600.$