A sum of ₹800 amounts to ₹920 in 3 years at simple interest. If the interest rate is increased by 3%, it would amount to how much?

₹992

Initial sum = 800

Amount after 3 years = 920

Interest of 3 years = 120

Interest of 1 year = 40

We know,

Simple interest = \(\frac{P×R×T }{100}\)

40 = \(\frac{800×R×1 }{100}\)

R = 5%

Interest rate is increased by 3%,

So New rate = 5% + 3% = 8%

Simple interest = \(\frac{800×8×3 }{100}\)

= 192

New amount = 800 + 192

= Rs. 992