Question

A sum of Rs. 7000 is invested in a bank at simple interest, after 3 years he invested Rs. 3000 more and after 8 years he earned total interest of Rs. 4970. What will be the rate of interest at which he invested the sum?

1. 7%
2. 4.5%
3. 8%
4. 9%

Answer 1

Correct Answer - Option 1 : 7%

Given:

7000 invested for first 3 years

After 3 years 3000 more invested 

Total interest after 8 years = 4970

Formula used:

Simple interest = (Principal × Rate × Time)/100

Calculation:

Let the rate of interest be R% per annum

So according to question,

(7000 × R × 3)/100 + (10000 × R × 5)/100 = 4970

⇒ 210R + 500R = 4970

⇒ 710R = 4970

⇒  R = 7%

∴ Rate of interest = 7%