Question

A sum of Rs. 800 amounts to Rs. 920 in 3 years at simple interest. If the rate of interest is increased by 5%, then the amount will increase to

• A. Rs. 940
• B. Rs. 1, 010
• C. Rs. 1, 020
• D. Rs. 1, 040

Answer 1

Answer: (D)

Rs. 1, 040

Given: $Principal=Rs.800,Amount=Rs.920,T=3years$
Simple interest $=920-800=120$
$\therefore$ Rate % $=\frac{120\times 100}{800\times 3}=5$%
If rate % is increased by 5%, i.e., if rate % = 10%, then
$SI=\frac{800\times 3\times 10}{100}=240$
$\therefore Amount=Rs.800+Rs.240=Rs.1,040$