Question

Simple interest is obtained on 4800 for 5yrs. At the rate of 12 p. c. p. a. If same interest is to be obtained for 3yrs. By how much should the rate of interest be increased?​

Answer 1

To find the increased rate of interest, we can use the formula for simple interest and set up an equation to solve for the rate. In this case, the rate needs to be increased by 0.8%.

Step-by-step explanation:

To find out how much the rate of interest needs to be increased, we can use the formula for simple interest:

Simple Interest = Principal * Rate * Time

Let's substitute the given values:

1. Principal (P) = $4800
2. Time (T) = 5 years
3. Simple Interest (SI) = ?

We need to find the rate (R).

Using the formula:

SI = P * R * T

4800 * R * 5 = SI

Now, let's calculate the value of SI:

SI = 4800 * R * 5

= 24000R

Now, we need to find the rate (R) when the same interest of 24000R is obtained for 3 years. Let's set up the equation:

24000R * 3 = 4800 * 12 * 3

72000R = 57600

R = 57600 / 72000

= 0.8

The rate of interest needs to be increased by 0.8%.