Multiple choice

The simple interest accrued, over a period of four years, on a certain sum would have been Rs.2000 more if the rate of interest had been 4% higher. Find the value of the sum.

  1. 20000

  2. 12000

  3. 10000

  4. 12500

  5. None of these

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

The difference in interest is given by the formula (P * R2 * T / 100) - (P * R1 * T / 100) = 2000. Since the difference in rate (R2 - R1) is 4% and time T is 4 years, we have P * 4 * 4 / 100 = 2000. Solving for P gives P = 2000 * 100 / 16 = 12500.