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    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?
    A Rs.1125 Correct Answer Incorrect Answer
    B Rs.1050 Correct Answer Incorrect Answer
    C Rs.2250 Correct Answer Incorrect Answer
    D Rs.1220 Correct Answer Incorrect Answer

    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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