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Sunil invested Rs. 25000 in the scheme of simple interest. If the invested amount is four times the interest earned in 1st three years, then find the interest earned at the end of 4 years.

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Sunil invested Rs. 25000 in the scheme of simple interest. If the invested amount is four times the interest earned in 1st three years, then find the interest earned at the end of 4 years.
1). Rs. 4900
2). Rs. 5440
3). Rs. 6330
4). Rs. 7223.33


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Answered by on | Votes 1 |

Time of investment is 3 years.

Amount invested is four times the interest earned in 1st 3 years.

& principle amount = Rs. 25000

∴ Principle amount = 4 × (Interest earned in 1st 3 years)

Simple interest = $(\frac{{\left( {principle\;amount\; \times \;rate\;of\;interest\; \times \;time} \right)}}{{100}})$

$(\therefore 25000 = \frac{{4 \times 25000 \times rate\;of\;interest \times 3}}{{100}})$

∴ 100 × 25000 = 12 × 25000 × Rate of interest

∴ Rate of interest = 100/12

∴ To find interest earned at the end of 4 years -

Simple interst = $(\frac{{principle\;amount\; \times \;rate\;of\;interst\; \times \;time\;of\;investment}}{{100}})$

∴ Simple interst = $(\frac{{25000\; \times \;100\; \times \;4}}{{100\; \times \;12}})$

∴ Simple interest earned in 4 years = Rs. 8333.33

∴ At the end of 4 years Sunil will earn Rs. 8333.33 interest.

Alternate:

As we know, Amount invested is four times the interest earned in 1st 3 years

Let ‘I’ be interest for 1 year

According to the question;

⇒ 25000 = 4 × 3 × I

⇒ I = 25000/12 = 2083.33

∴ Interest for 4 years = 4 × I = 4 × 2083.33 = 8333.33

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