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      Question

      Suresh invested Rs. 12,000 at simple interest of 5% p.a. If

      he kept withdrawing Rs. 2,000 after every one year, then find the total interest earned by Suresh at the end of three years. [Consider that the interest is payable at the end of three years, only]
      A Rs. 1,500 Correct Answer Incorrect Answer
      B Rs. 1,600 Correct Answer Incorrect Answer
      C Rs. 1,800 Correct Answer Incorrect Answer
      D Rs. 1,700 Correct Answer Incorrect Answer
      E None of these Correct Answer Incorrect Answer

      Solution

      Simple interest = Sum × rate of interest × time period ÷ 100
      So, interest earned in the first year
      = 12000 × 5 × 1 ÷ 100 = Rs. 600
      And interest earned in the second year
      = (12000 − 2000) × 5 × 1 ÷ 100 = Rs. 500
      And interest earned in the third year
      = (12000 − 4000) × 5 × 1 ÷ 100 = Rs. 400
      So, total interest earned = 600 + 500 + 400 = Rs. 1,500

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