Question

A person invested Rs. 2,000 on simple interest for 7 years to obtain a total amount of Rs. 3,400 on a certain annual rate of interest. What was the rate of interest to obtain the above amount ?
1. 8%
2. 9%
3. 10%
4. 7%

Answer 1

Correct Answer - Option 3 : 10%

Given:

The person invested Rs. 2,000 on simple interest for 7 years and obtain a total amount of Rs. 3,400 on a certain annual rate of interest.

Concept Used:

If P be the principal and r be the rate of interest then interest after t year will be (prt/100)

Amount (A) = Principal (P) + Interest

Calculation:

Here,

Principal (P) = Rs. 2000

Time (t) = 7 years

Amount after 7 years (A) = 3400

Interest = A - P

⇒ 3400 - 2000

⇒ 1400

Let, the rate of interest be r%

Accordingly,

(2000 × r × 7)/100 = 1400

⇒ r = 10

∴ The rate of interest was 10%