Multiple choice

Victoria and her younger brother came to know about a scheme from their friends. Both of them used to get some pocket money every month. When they heard about the scheme, they counted up the money they both had together. They had \$2,500. According to the scheme, if they invested the money they had at the rate of 12%, they would earn an interest of \$2,100 in 7 years at simple rate of interest, but the company changed the scheme. According to the new scheme, the new rate of interest was 10% less than double the earlier rate. Now what is the increase in the interest they would have earned?

  1. $350
  2. $370
  3. $410
  4. $435
  5. $465
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A Correct answer
AI explanation

The original rate was 12%, and the new rate is 10% less than double the earlier rate, calculated as (2 * 12%) - 10% = 14%. Using the simple interest formula, the interest at the original 12% rate is (2500 * 12 * 7) / 100 = \$2100. The interest at the new 14% rate is (2500 * 14 * 7) / 100 = \$2450. The increase in interest is 2450 - 2100 = $350.