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      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 Γ— Rate Γ— Time Γ· 100
      So, interest earned in the first year
      = 20000 Γ— 10 Γ— 1 Γ· 100 = Rs. 2000
      Interest earned in the second year
      = (20000 βˆ’ 4000) Γ— 10 Γ— 1 Γ· 100 = Rs. 1600
      Interest earned in the third year
      = (20000 βˆ’ 8000) Γ— 10 Γ— 1 Γ· 100 = Rs. 1200
      So, total interest earned = 2000 + 1600 + 1200 = Rs. 4,800

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