Multiple choice

A principal amount of Rs. 900 becomes Rs. 1200 in 4 years at a certain rate of simple interest. If the rate of interest is increased by 5%, then what will be the amount in 3 years?

  1. Rs. 1060

  2. Rs. 1160

  3. Rs. 1260

  4. Rs. 1350

  5. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Interest = 1200 - 900 = 300. Time = 4 years. Rate = (300 * 100) / (900 * 4) = 30000 / 3600 = 8.33%. New rate = 8.33 + 5 = 13.33%. New interest for 3 years = (900 * 13.33 * 3) / 100 = 360. New amount = 900 + 360 = 1260.

AI explanation

First, find the original rate using the simple interest formula: the interest is 1200 - 900 = 300, so 300 = (900 * R * 4) / 100, which gives R = 25/3%. The new rate is 25/3 + 5 = 40/3%. Using the simple interest formula for 3 years at this new rate, the interest is (900 * (40/3) * 3) / 100 = 360. The final amount is the principal plus this interest: 900 + 360 = Rs. 1260.

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