Multiple choice

A sum was put at simple interest at a certain rate for $2$ years. Had it been put at $2$% higher rate, it would have fetched Rs $50$ more. Find the sum.

  1. Rs $2,000$
  2. Rs $1250$
  3. Rs $3,000$
  4. Rs $5,000$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Simple interest formula is I = (P * R * T) / 100. The difference in interest for a 2% rate increase over 2 years is 50. So, (P * 2 * 2) / 100 = 50. This simplifies to 4P / 100 = 50, or P = 5000 / 4 = 1250.

AI explanation

The additional interest earned is due to the extra 2% rate applied to the principal over 2 years, expressed as (P * 2 * 2) / 100. Setting this equal to the extra Rs 50 fetched gives the equation (P * 4) / 100 = 50. Solving for P results in a principal sum of Rs 1250.

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