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After adding a simple interest of $ 270 an investment

Interest Problems

GMAT Simple Interest QuestionQ) After adding a simple interest of $ 270 an investment becomes $1395. If the principal was invested at 6% p.a. simple interest, for how long was the principal invested.

A) 3 Years
B) 4 Years
C) 5 Years
D) 6 Years
E) 7 Years

Solution: As a Simple Interest problem, this question would make use of the formula,

SI = Principal * Rate * Time

Amount = SI + Principal

Plugging in values, we get,
$1395 = $ 270 + Principal

Principal = $1395 - $270 => $1125

Using the formula to calculate time period, we get,
$270 = $1125*0.06*Time
=> Time = 4 years

Correct Answer: BAbout the Author

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