Rs. 6,000 is invested at 10% p.a. on simple interest. If that interest is added to the principal after every 20 years, the amount will become Rs. 28,000 after :-

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  1. 20 years
  2. 25 years 
  3. 25.55 years
  4. 30 years

Answer (Detailed Solution Below)

Option 3 : 25.55 years
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Detailed Solution

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Given:

Principal (P) = Rs. 6,000

Rate of interest (R) = 10% p.a.

Final amount (A) = Rs. 28,000

Formula Used:

Simple Interest (SI) = (P × R × T) / 100

Amount (A) = Principal + Interest

Calculation:

Since the interest is added to the principal after every 20 years, we need to find the time (T) in years where the amount becomes Rs. 28,000.

First 20 years:

SI1 = (6000 × 10 × 20) / 100

⇒ SI1 = 12000

New Principal after 20 years = P + SI1

New Principal = 6000 + 12000 = 18000

SI2 = 28000 - 18000 = 10000

SI2 = (18000 × 10 × T)/100

⇒ 10000 = (18000 × 10 × T)/100

⇒ 10000/1800 = T

⇒ T = 5.55 years.

Total Time = 20 years + 5.55 years = 25.55 years

The correct answer is option 3.

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