The income of a company increased by 25% per year. If its income is Rs 31,25,000 in the year 2017, what was the income in 2015?

Options

A. Rs `25,00,000`
B. Rs `22,00,000`
C. Rs `20,00,000`
D. Rs `20,20,000`

Answer

To find the income of the company in 2015, we need to work backwards from the income in 2017, taking into account the annual increase of 25%.

### Step-by-Step Solution:

1. **Identify the income in 2017**:
The income in 2017 is given as Rs 31,25,000.

2. **Understand the increase**:
The income increases by 25% each year. This means that if we denote the income in the previous year as \( I \), then the income for the current year can be expressed as:
\[ \text{Current Year Income} = I + 0.25I = 1.25I \]

3. **Calculate the income for 2016**:
To find the income for 2016, we can rearrange the formula:
\[ I = \frac{\text{Current Year Income}}{1.25} \]
Substituting the income for 2017:
\[ I_{2016} = \frac{31,25,000}{1.25} \]
Calculating this gives:
\[ I_{2016} = 31,25,000 \div 1.25 = 25,00,000 \]

4. **Calculate the income for 2015**:
Now, we will repeat the process to find the income for 2015 using the income for 2016:
\[ I_{2015} = \frac{I_{2016}}{1.25} = \frac{25,00,000}{1.25} \]
Calculating this gives:
\[ I_{2015} = 25,00,000 \div 1.25 = 20,00,000 \]

5. **Final Result**:
Therefore, the income of the company in 2015 was Rs 20,00,000.