A sum of ₹9500 amounts to ₹11495 in 2 years at a certain rate percent per annum, interest compounded yearly. What is the simple interest (in ₹) on the same sum for the same time and double the rate?
Answer & explanation
Correct answer: option 4
Amount = Principal × ( 1 + \(\frac{rate }{100}\) )t
11495 = 9500 × ( 1 + \(\frac{rate }{100}\) )2
\(\frac{11495}{9500}\) = ( 1 + \(\frac{rate }{100}\) )2
\(\frac{121}{100}\) = ( 1 + \(\frac{rate }{100}\) )2
1 + \(\frac{rate }{100}\) = \(\frac{11}{10}\)
Rate = 10%
Now ,
new rate = 2 × 10% = 20%
Simple interest = \(\frac{P×R×T}{100}\)
= \(\frac{9500×20×2}{100}\)
= 3800