Q.If a principal amount yields a total of ₹7,100 (principal + simple interest) in 7 years and ₹6,200 in 4 years at the same annual rate of simple interest, find the principal and the annual rate of simple interest.

Interest received in (7 − 4) = 3 years = ₹(7100 − 6200) = ₹900 ∴ Interest received in 4 years = \(\cfrac{900}{3} × 4 = ₹1200\) ∴ Out of the total ₹6200 (principal + interest) after 4 years, Principal \((p) = ₹6200 − ₹1200 = ₹5000\) Time \((t) = 4\) years Interest \((I) = ₹1200\) ∴ Rate of interest \((r) = \cfrac{100 × I}{p × t}\%\) \[ = \cfrac{100 × 1200}{5000 × 4}\% = 6\% \] ∴ The principal was ₹5000 and the annual rate of simple interest was 6%.
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