Test Index

Time Value of Money

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Question : 30 of 99

Marks: +1, -0

In what time will

\text{Rs.}\,85,000

\text{Rs.}\,1,57,675

4.5\%

p.a. S.I.?

20 years
15 years
22 years
19 years

Solution:

Concept:

Simple Interest formula:

\text{SI} = \frac{P \times R \times T}{100}

.

Explanation:

Principal

P = \text{Rs.}\,85,000

, Amount

A = \text{Rs.}\,1,57,675

, Rate

R = 4.5\%

.

Simple Interest

\text{SI} = A - P = \text{1,57,675} - \text{85,000} = \text{Rs.}\,\text{72,675}

.

Using

\text{SI} = \frac{P \times R \times T}{100}

, we get

72,675 = \frac{85,000 \times 4.5 \times T}{100}

.

72,675 = \frac{382,500 \times T}{100}

? Actually

85,000 \times 4.5 = 382,500

, so

\frac{382,500 T}{100} = 3,825 T

.

Thus

72,675 = 3,825 T

.

T = \frac{72,675}{3,825} = 19

.

Answer:

19 years.

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