Multiple choice

A sum of 3125 amounts to 3515.20 in 3 years at x % p.a., interest being compounded yearly. What will be the simple interest (in `) on the same sum and for the same time at (x + 2)% p.a.?

  1. 562.50

  2. 554

  3. 550

  4. 565.50
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

3515.20 = 3125 * (1 + x/100)^3. (1 + x/100)^3 = 1.124864. 1 + x/100 = 1.04, so x = 4. New rate = 4 + 2 = 6%. Simple interest = (3125 * 6 * 3) / 100 = 562.50.

AI explanation

Using the compound interest formula, 3515.20 equals 3125 multiplied by (1 + r divided by 100) cubed. Solving this gives a compound interest rate of 4% per annum, making the new simple interest rate (4 + 2) equal to 6%. Applying the simple interest formula, the interest equals 3125 multiplied by 6 multiplied by 3 divided by 100, which results in 562.50.

Keep practicing — related questions