A person took a loan at 5% per annum simple interest during the first year and with an increase of 0.5% simple interest every year from the second year onwards. After 4 years, he paid Rs. 4,600 as a total interest to settle the loan completely. How much was the loan?  

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SSC CGL 2023 Tier-I Official Paper (Held On: 17 Jul 2023 Shift 3)
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  1. Rs. 20,000
  2. Rs. 19,000
  3. Rs. 18,000
  4. Rs. 21,000

Answer (Detailed Solution Below)

Option 1 : Rs. 20,000
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Detailed Solution

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Given:

Rate of interest for first year = 5%

Formula used:

Simple interest (S.I) = (P × R × T)/100

Where, P = principal ; R = rate ; T = time

Calculation:

According to the question:

⇒ (P × 5 × 1)/100 + (P × 5.5 × 1)/100 + (P × 6 × 1)/100 + (P × 6.5 × 1)/100 = 4600

⇒ P/100 [5 + 5.5 + 6 + 6.5] = 4600

⇒ 23P = 4600 × 100

⇒ P = 20000

∴ The correct answer is 20000.    

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