At the rate of 8% the amount invested earns simple interest of ₹240 after 3 years. If the rate of interest had been 5% more, then how much more interest would it have earned?
Answer & explanation
Correct answer: option 3
We know ,
Simple Interest = \(\frac{Principal ×Rate × Time }{100}\)
240 = \(\frac{Principal × 8 × 3 }{100}\)
Principal = 1000
Rate is increased by 5%
New Rate = 8% + 5% = 13%
Simple Interest = \(\frac{1000 × 13 × 3 }{100}\)
= Rs.390
More interest earned than before = 390 - 240 = Rs. 150