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Interest - Quant/Math - CAT 2009
Question 4 the day:
July 9, 2003
The question for the day is from the topic of Interest.
- How long will it take for a sum of money to grow from Rs.1250 to Rs.10,000, if it is invested at 12.5% p.a simple interest?
| (1) |
8 years |
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(2) |
64 years |
| (3) |
72 years |
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(4) |
56 years |
Correct Answer - (4)
Solution:
Simple interest is given by the formula SI = (pnr/100), where p is the principal, n is the number of years for which it is invested, r is the rate of interest per annum
In this case, Rs. 1250 has become Rs.10,000.
Therefore, the interest earned = 10,000 – 1250 = 8750.
8750 = [(1250*n*12.5)/100]
=> n = 700 / 12.5 = 56 years.
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