Question
Download Solution PDFA 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?
Answer (Detailed Solution Below)
Detailed Solution
Download Solution PDFGiven:
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.
Last updated on Jul 8, 2025
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