Multiple choice

A sum of Rs. 1200 amounts to Rs. 1740 in 3 years at simple interest. If rate of interest is increased by 3%, then what will be the new amount (in Rs.)?

  1. 1848

  2. 1946

  3. 1812

  4. 1924
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A Correct answer
Explanation

Simple interest I = 1740 - 1200 = 540 for 3 years. Rate R = (540 * 100) / (1200 * 3) = 15%. New rate = 18%. New interest = (1200 * 18 * 3) / 100 = 648. New amount = 1200 + 648 = 1848.

AI explanation

Using the simple interest formula, the interest earned over 3 years is 1740 minus 1200, which equals Rs. 540. The annual interest is therefore Rs. 180, and a 3% increase in the rate adds 3% of the principal to the annual interest: 3% of 1200 is Rs. 36. Over 3 years, this extra interest amounts to 36 times 3, equaling Rs. 108, so the new total amount is 1740 plus 108, resulting in Rs. 1848. The new amount is Rs. 1848.

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