Question:
Mike invested 1,000 at simple interest. If the amount became 3 times in 12.5 years then what will be the total amount of the investment after 25 years?
Mike invested 1,000 at simple interest. If the amount became 3 times in 12.5 years then what will be the total amount of the investment after 25 years?
Updated On: Mar 5, 2025
- ₹ 3000
- ₹ 5000
- ₹ 7000
- ₹ 9000
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The Correct Option is B
Solution and Explanation
Step 1: Use the simple interest formula:
- A = P + P × r × t
- Where:
- A is the final amount.
- P is the principal.
- r is the rate of interest per annum.
- t is the time in years.
Step 2: Given that the amount becomes 3 times in 12.5 years:
- 3P = P + P × r × 12.5
- 3P − P = P × r × 12.5
- 2P = P × r × 12.5
- r = 2 ÷ 12.5 = 0.16 = 16%
Step 3: Find the total amount after 25 years:
- A = P + P × 0.16 × 25
- A = 1000 + 1000 × 4 = 1000 + 4000 = 5000
Final Conclusion: The correct answer is (B) ₹5000.
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