Question

A sum of Rs. 7,200 amounts to Rs. 9,360 in 6 years at a certain rate of simple interest. The amount, if the rate of interest is increased by 4% is (in rupees)
1. Rs. 10,080
2. Rs. 10,880
3. Rs. 11,088
4. Rs. 12,880

Answer 1

Correct Answer - Option 3 : Rs. 11,088

Given:

Principal = Rs. 7,200

Amount = Rs. 9,360

Time = 6 years

Increased Rate of interest = 4%

Formula used:

Amount = Principal + Simple Interest

Simple Interest, = (Principal × Rate × Time)/100

Calculation:

As we know that

Amount = Principal + Simple Interest

⇒ Rs. 9,360 = Rs. 7,200 + SI

⇒ Rs. 2,160 = SI

Now, 

Simple Interest, = (Principal × Rate × Time)/100

⇒ Rs. 2,160 = (Rs. 7,200 × R × 6)/100

⇒ (2,160 × 100)/(7,200 × 6) = R

⇒ 5% = R

So, Increased Rate of interest = (4 + 5)%

⇒ 9%

Again,

Simple Interest, = (Principal × Rate × Time)/100

⇒ (7,200 × 9 × 6)/100

⇒ Rs. 3,888

Again,

Amount = Principal + Simple Interest

⇒ Rs. (7,200 + 3,888)

⇒ Rs. 11,088

∴ The amount after 4% increment in rate of interest is Rs. 11,088.