Question

A sum of Rs. 800 amounts to Rs. 920 in 3 years at simple interest. What would be the amount, if the interest rate is increased by 3%?

• A. Rs. 800
• B. Rs. 192
• C. Rs. 992
• D. Rs. 120

Hint:

Remember the simple interest formula: \( SI = \frac{P \times R \times T}{100} \). When the interest rate changes, calculate the new interest based on the original principal and time.

Answer 1

The Correct Option is C

Step 1: Calculate the initial simple interest.
Initial Simple Interest (SI) = Amount − Principal = ₹920 − ₹800 = ₹120

Step 2: Calculate the initial rate of interest (R).
Using the formula: \[ SI = \frac{P \times R \times T}{100} \] \[ 120 = \frac{800 \times R \times 3}{100} \] \[ 120 = 24R \] \[ R = \frac{120}{24} = 5\% \]

Step 3: Calculate the new rate of interest.
New rate \(R = 5\% + 3\% = 8\%\)

Step 4: Calculate the new simple interest.
\[ SI = \frac{800 \times 8 \times 3}{100} = 192 \]

Step 5: Calculate the new amount.
New Amount = ₹800 + ₹192 = ₹992