If rate of interest reduces from 5% to 4%, a man gets Rs. 250 less as his yearly interest. What is the capital investment of the person ?

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WBSSC Group D Official Paper (Held On: 19 Feb, 2017)
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  1. Rs. 22,500
  2. Rs. 25,000
  3. Rs. 20,000
  4. Rs. 25,500

Answer (Detailed Solution Below)

Option 2 : Rs. 25,000
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Detailed Solution

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Given:

Rate of interest reduces from 5% to 4%

Yearly interest difference = ₹250

Formula used:

Yearly Interest = Principal × Rate × Time / 100

Calculation:

Let the capital investment (Principal) be ₹x.

Difference in interest: Interest at 5% - Interest at 4% = ₹250

⇒ x × 5 × 1 / 100 - x × 4 × 1 / 100 = 250

⇒ x × (5 - 4) / 100 = 250

⇒ x × 1 / 100 = 250

⇒ x = 250 × 100

⇒ x = ₹25,000

∴ The correct answer is option (2).

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