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    A person learns that when the interest rate decreases from 8% to 7.75%, his annual income decreases by ₹61.50. What is his principal amount?
    Question

    A person learns that when the interest rate decreases from 8% to 7.75%, his annual income decreases by ₹61.50. What is his principal amount?

    A.

    26000

    B.

    24600

    C.

    23800

    D.

    22400

    Correct option is B

    Given:

    - Original interest rate = 8% per annum

    - New interest rate = 7.75% per annum

    - Annual income decreased by = ₹61.50
    Formula Used:

    - Simple Interest Formula:

    Interest = (Principal×Rate×Time)100\frac{ (Principal × Rate × Time) }{100}​​

    - Since time is 1 year and decrease in income is due to rate decrease:

    Decrease in income = (P×Difference in Rate×1)100\frac{ (P × Difference \ in \ Rate × 1) }{ 100}​​
    Solution:

    - Difference in Rate = 8% - 7.75% = 0.25%

    - Let Principal = P

    =>(P×0.25×1)100=61.50 =>P=(61.50×100)0.25=> \frac{(P × 0.25 × 1) }{ 100} = 61.50 \\\ \\=> P = \frac{(61.50 × 100) }{ 0.25}​​

    => P = ₹24,600
    The principal amount is ₹24,600.

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