What sum of money will amount to Rs. 520 in 5 years and to Rs 568 in 7 years on simple interest?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Rs. 400
Under simple interest the interest is the same every year, so the difference between the two amounts is the interest for the 2 extra years.
Interest for 2 years \(=568-520=48\), so Rs. 24 a year
Interest for 5 years \(=5\times24=120\)
Sum \(=\) amount after 5 years \(-\) interest \(=520-120=400\)