A person who pays income tax at the rate of 4 paise per rupee, find that fall of interest rate (income tax) from 4% to 3.75% diminishes his net yearly income by Rs. 48. What is his capital ?

A. Rs. 24000

B. Rs. 25000

C. Rs. 20000

D. Rs. 18000

Answer: Option C

Solution(By Examveda Team)

Capital after paying income tax
$$\eqalign{ & \Rightarrow {\text{4}}\% - {\text{3}}{\text{.75}}\% = {\text{48}} \cr & \Rightarrow {\text{0}}{\text{.25}}\% {\text{ = 48}} \cr & {\text{100}}\% {\text{ = }}\frac{{48}}{{0.25}} \times 100 \cr & \,\,\,\,\,\,\,\,\,\,\,\,\,\,\, = 19200 \cr} $$
⇒ Capital without paying income tax
⇒ 19200 = Capital × 96%
Net capital = 20000