Simple Interest: Simple interest is the interest calculated on the principal amount only for a certain period of time. It is calculated using the formula:
Simple Interest (SI) = (Principal Amount * Rate of Interest * Time Period) / 100
Given:
Principal Amount (P) = Rs 450
Rate of Interest (R) = ?
Time Period (T) = 3 years
Simple Interest (SI) = Rs 504
SI = (P * R * T) / 100
⇒ 504 = (450 * R * 3) / 100
⇒ R = 8% per annum
Now, we have to calculate the amount of Rs 615 after 3 years at the same rate of 8% per annum:
Principal Amount (P) = Rs 615
Rate of Interest (R) = 8% per annum
Time Period (T) = 3 years
Simple Interest (SI) = ?
SI = (P * R * T) / 100
⇒ SI = (615 * 8 * 3) / 100
⇒ SI = Rs 93.20
Therefore, the total amount = Principal Amount + Simple Interest = 615 + 93.20 = Rs 708.20
Hence, the answer is Option C - Rs 676.50
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Simple interest is calculated on the principal amount for a given time period at a given rate of interest. The formula for calculating Simple Interest is as follows:
SI = (P x R x T)/100
Where,
SI = Simple Interest
P = Principal Amount
R = Rate of Interest
T = Time Period
In this question, the principal amount is Rs 9125, the rate of interest is 4% p.a. and the time period is from April 5, 1987 to August 10, 1987.
Now, we will convert the time period from months to years and calculate the simple interest.
Time Period in Years = (August 10, 1987 – April 5, 1987) / 12
Time Period in Years = 4/12
Time Period in Years = 0.33
Therefore, the Simple Interest on Rs 9125 at 4% p.a. for 0.33 years is:
SI = (9125 x 4 x 0.33)/100
SI = Rs 127
Hence, the Simple Interest on Rs 9125 at 4% p.a. from April 5, 1987 to August 10, 1987 is Rs 127.
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Compound interest is the interest that is calculated on the initial principal and also on the accumulated interest of previous periods of a loan or deposit. It is the interest that is calculated more than once in a year, or the interest that is calculated on the principal amount and the interest earned in the previous periods.
Formula for compound interest:
A = P(1 + r/n)^ (nt)
where,
A = Compound Interest
P = Principal Amount
r = Rate of Interest
n = Number of times the interest is compounded in a year
t = Number of years
For the given question,
A = 4P
A = P(1 + r/n)^ (nt)
4P = P(1 + r/n)^ (nt)
(1 + r/n)^ (nt) = 4
We need to find the value of ‘t’, i.e., the number of years for which the sum of money four folds itself.
We are given that the sum four folds itself in 24 years.
We need to find the number of years for which it sixteen folds itself.
Let us assume that the time required for the same to sixteen fold itself is ‘t’ years.
We have,
(1 + r/n)^ (nt) = 16
We know that the time taken for the sum of money to four fold itself is 24 years.
Therefore,
(1 + r/n)^ (24n) = 4
(1 + r/n)^ (nt) = 16
We need to find the value of ‘t’.
(1 + r/n)^ (24n) = 4
(1 + r/n)^ (nt) = 16
Dividing,
(1 + r/n)^ (nt)/(1 + r/n)^ (24n) = 16/4
(1 + r/n)^ (nt – 24n) = 4
Taking ‘nth’ root on both sides,
(1 + r/n)^ (t – 24) = 4^1/n
t – 24 = log4^1/n (1 + r/n)
t = 24 + log4^1/n (1 + r/n)
Therefore, the time taken for the sum of money to sixteen fold itself is 48 years.
Hence, the correct answer is Option B: 48 years.
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Compound interest is the interest that is calculated on the initial principal amount and also on the accumulated interest of previous periods of a deposit or loan.
Compound Interest Formula:
Compound Interest (C.I) = P (1 + r/100) n - P
Where,
P = Principal Amount
r = Rate of interest per annum
n = Number of years
Given:
Principal Amount (P) = Sum of money
Rate of Interest (r) = x% p.a.
Now, we have to find the number of years (n) in which the sum of money will four fold itself at the same rate of interest p.a.
We know that,
Amount (A) = P (1 + r/100) n
As, Amount (A) = 4P
⇒ 4P = P (1 + r/100) n
⇒ 4 = (1 + r/100) n
Now, we have to find n.
We know that,
A sum of money doubles itself in 10 years at the same rate of interest p.a.
It means,
2P = P (1 + r/100) 10
⇒ 2 = (1 + r/100) 10
We know that,
A sum of money four fold itself in 20 years at the same rate of interest p.a.
It means,
4P = P (1 + r/100) 20
⇒ 4 = (1 + r/100) 20
Now, divide equation (1) by equation (2)
⇒ (1 + r/100) n/ (1 + r/100) 10 = (1 + r/100) 20/2
⇒ (1 + r/100) (n - 10) = (1 + r/100) 10
⇒ n - 10 = 10
⇒ n = 20
Hence, the sum of money four fold itself in 20 years at the same rate of interest p.a.
Answer: Option C (20 years)
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