Question
Rs. 2,800 increases to Rs. 3,640 in 4 years at a simple
interest rate of r% per annum. If Rs. 7,000 is put at 2r% per annum for 1 year, how much interest will it earn?Solution
ATQ,
Interest earned in 4 years = 3640 – 2800 = Rs. 840
Simple interest = Sum invested × rate of interest × time period in years ÷ 100
So, 840 = 2800 × r × 4 ÷ 100
Or, r = 840 ÷ (4 × 28)
So, r = 7.5
So, new rate of interest = 2 × 7.5 = 15% p.a.
So, required interest = 7000 × 15 × 1 ÷ 100 = Rs. 1,050
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