Multiple choice

A sum of money was invested at a certain rate of simple interest for 2 years. Had it been invested at 1% higher rate, it would have fetched Rs 24 more interest. The sum of money is :

  1. Rs 1200

  2. Rs 1050

  3. Rs 1000

  4. Rs 9600
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A Correct answer
Explanation

For simple interest, extra interest earned at a higher rate = Principal × Extra Rate × Time. Here, Rs 24 = P × 1% × 2 years = P × 0.01 × 2. Therefore, P = 24 / 0.02 = Rs 1200. This is a straightforward application of the simple interest formula.

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