Question

    Amit invested Rs. 20,000 at simple interest of 10% p.a. If

    he withdrew Rs. 4,000 after every one year, then find the total interest earned by Amit at the end of three years. [Consider that the interest is payable at the end of three years only]
    A Rs. 4,800 Correct Answer Incorrect Answer
    B Rs. 4,200 Correct Answer Incorrect Answer
    C Rs. 4,000 Correct Answer Incorrect Answer
    D Rs. 3,600 Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    Simple interest = Sum × Rate × Time ÷ 100
    So, interest earned in the first year
    = 20000 × 10 × 1 ÷ 100 = Rs. 2000
    Interest earned in the second year
    = (20000 − 4000) × 10 × 1 ÷ 100 = Rs. 1600
    Interest earned in the third year
    = (20000 − 8000) × 10 × 1 ÷ 100 = Rs. 1200
    So, total interest earned = 2000 + 1600 + 1200 = Rs. 4,800

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