Multiple choice

A principal amount is invested at a certain rate for 2 years. If the rate of interest is increased by 1%, then the difference in simple interest is Rs. 24. Find the principal amount.

  1. Rs. 1200

  2. Rs. 1050

  3. Rs. 1000

  4. Rs. 9600
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A Correct answer
Explanation

Simple Interest formula is I = (P * R * T) / 100. The difference in interest when the rate increases by 1% is (P * (R+1) * 2) / 100 - (P * R * 2) / 100 = 24. This simplifies to (P * 2) / 100 = 24, so P = 2400 / 2 = 1200.

AI explanation

Let the principal be P, so the difference in simple interest for 2 years from a 1% rate hike is calculated as (P * 1 * 2) / 100 = 24. Solving this equation, P = (24 * 100) / 2, which gives the principal amount of Rs. 1200.

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