Multiple choice

A sum was invested at a certain rate of interest for 8 years. If the sum were invested at 5% more rate of interest, it would have Rs. 220 more. What is the sum (in Rs)?

  1. 330

  2. 350

  3. 4400

  4. 550

  5. 650

Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Let P be the principal sum at rate R% for 8 years. Simple Interest = P × R × T / 100. If rate increases by 5%, the extra interest earned is P × 5 × 8 / 100 = 2P/5. Given this equals Rs. 220, so P = 550. Therefore, Rs. 550 was invested.