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    Question

    An amount was invested at simple interest for 2 years.

    If the rate had been 8% higher, the interest would have increased by Rs. 320. What is the principal amount?
    A Rs.2000 Correct Answer Incorrect Answer
    B Rs.1500 Correct Answer Incorrect Answer
    C Rs.1520 Correct Answer Incorrect Answer
    D Rs.1800 Correct Answer Incorrect Answer

    Solution

    Let initial rate of interest be r% per annum.
    Let the principal be Rs. P
    According to question;
    P × (r + 8)/100 × 2 – P × r/100 × 2 = 320
    Or, P(r + 8) – Pr = 320 × 100/2 = 16000
    Or, 8P = 16000
    So, P = 16000/8 = Rs. 2000

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