Rs. 800 becomes Rs. 956 in 3 years at a certain rate of interest. If the rate of interest is increased by 4% what amount will Rs. 800 become in 3 years?a)Rs. 1020b)Rs. 1052c)Rs. 1282d)Rs. 1080Correct answer is option 'B'. Can you explain this answer?

Question

Answer

Calculation of New Amount
To find the new amount after increasing the rate of interest by 4%, we can use the formula for compound interest:
Formula:
Amount = Principal * (1 + Rate/100)^Time
Calculation:
Given,
Principal (P) = Rs. 800
Time (T) = 3 years
Rate of interest (R) = Let's assume the initial rate of interest is 'x'
Amount after 3 years with initial rate:
956 = 800 * (1 + x/100)^3
To find 'x', we can solve this equation.
New Rate of Interest:
New Rate of interest = Initial rate + 4% = x + 4
Calculation of New Amount:
Using the new rate of interest in the formula:
Amount = 800 * (1 + (x + 4)/100)^3
Now, calculate the new amount using the new rate of interest.
Answer:
The amount Rs. 800 will become in 3 years with an increased rate of interest by 4% is Rs. 1052.
Therefore, the correct answer is option 'B' - Rs. 1052.

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