Multiple choice

A sum of Rs. $600$ amount to Rs. $720$ in $4$ year. What will be its amount if the rate of interest is increased by $2\%$?

  1. Rs. $724$
  2. Rs. $648$
  3. Rs. $768$
  4. Rs. $792$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Original interest rate: 120 / (600 * 4) = 0.05 = 5%. New rate = 7%. New amount = 600 + (600 * 0.07 * 4) = 600 + 168 = 768.

AI explanation

The simple interest earned over 4 years is the difference between the final amount and the principal, which is 720 minus 600, giving Rs. 120. The annual interest is therefore 120 divided by 4, which is Rs. 30. Increasing the rate by 2 percent on a principal of Rs. 600 adds an extra Rs. 12 per year, making the new annual interest Rs. 42, and over 4 years this amounts to Rs. 168. Adding this new interest to the original principal of Rs. 600 gives a new total amount of Rs. 768.

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