Multiple choice

A sum was put on simple interest at a certain rate for 4 years. Had it been put at a 5% higher rate, it would have fetched Rs. 200 more. Find the sum.

  1. Rs. 1000

  2. Rs. 1100

  3. Rs. 1200

  4. Rs. 1500

  5. Rs. 2000
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A Correct answer
Explanation

Simple Interest formula: SI = P * R * T / 100. The difference in interest for a 5% rate increase over 4 years is P * 5 * 4 / 100 = 200. Thus, 20P / 100 = 200, so P/5 = 200, P = 1000.

AI explanation

Using the simple interest formula, the extra interest generated by the higher rate is calculated as Principal multiplied by extra Rate multiplied by Time divided by 100. We substitute the given values to get 200 equals Principal multiplied by 5 multiplied by 4 divided by 100. Solving this equation, the principal sum is Rs. 1000.

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