Discussion

If the annual rate of simple interest increases from 10% to 12 1/2 %, a man's yearly income increases by Rs. 1250. His principal in Rs. is?

Answer: B

\[ \text{SI} = \frac{P \times R \times T}{100} \]

The extra income comes from the \( 12\tfrac{1}{2} - 10 = 2.5 \) percentage points, over one year.

\[ \frac{P \times 2.5 \times 1}{100} = 1250 \]

\[ 0.025P = 1250 \quad\Longrightarrow\quad P = \text{Rs. } 50{,}000 \]

Checking: Rs. 5000 a year at 10% against Rs. 6250 at 12.5%.

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