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The interest on a certain deposit at 4.5% p.a. is Rs. 202.50 in one year. How much will the additional interest in one year be on the same deposit at 5% p.a.?

Question

The interest on a certain deposit at 4.5% p.a. is Rs. 202.50 in one year. How much will the additional interest in one year be on the same deposit at 5% p.a.?

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Solution

1. Break Down the Problem

To find the additional interest for one year at 5% p.a. compared to 4.5% p.a., we need to:

  1. Determine the principal amount based on the interest earned at 4.5%.
  2. Calculate the interest at 5% on the same principal.
  3. Find the difference between the two interest amounts.

2. Relevant Concepts

  • Formula for calculating interest: Interest=Principal×Rate100×Time \text{Interest} = \text{Principal} \times \frac{\text{Rate}}{100} \times \text{Time}

3. Analysis and Detail

  1. Calculate Principal from 4.5% Interest:

    • Given interest I=202.50 I = 202.50 and rate r=4.5% r = 4.5 \% : 202.50=Principal×4.5100×1 202.50 = \text{Principal} \times \frac{4.5}{100} \times 1
    • Rearranging to find the principal: Principal=202.50×1004.5=4500 \text{Principal} = \frac{202.50 \times 100}{4.5} = 4500
  2. Calculate Interest at 5%:

    • Use the principal identified above: I5%=4500×5100×1=225 I_{5\%} = 4500 \times \frac{5}{100} \times 1 = 225
  3. Calculate Additional Interest:

    • Additional interest at 5% compared to 4.5%: Additional Interest=I5%I4.5%=225202.50=22.50 \text{Additional Interest} = I_{5\%} - I_{4.5\%} = 225 - 202.50 = 22.50

4. Verify and Summarize

  • The principal is calculated correctly as Rs. 4500.
  • The 5% interest on this principal is Rs. 225.
  • The additional interest earned when switching from 4.5% to 5% is Rs. 22.50.

Final Answer

The additional interest in one year at 5% p.a. will be Rs. 22.50.

This problem has been solved

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