You deposit Rs. 400 in to a bank account paying 5% simple interest per year. How much interest would you have earned after 3 years?
A
Rs. 30
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B
Rs. 60
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C
Rs. 45
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D
Rs. 55
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Solution
The correct option is BRs. 60 First we need to find 5% of Rs. 400. 10% of Rs. 400 = Rs. 40 so 5% is Rs. 20. As the bank pays simple interest, this amount stays the same. Therefore, after 3 years you will have earned 20 + 20 + 20 = Rs. 60.