A sum of ₹10,000 is lent at a certain rate of simple interest. The amount at the end of 5 years is ₹15,000. If the rate of interest were 2% more, what would the simple interest be at the end of 5 years?
Show answer & explanation
Correct answer: C
Explanation
Given:
Principal = ₹10,000
Amount after 5 years = ₹15,000
Time = 5 years
According to the formula:
Simple Interest = (Principal × Rate × Time) / 100
Simple Interest = 15,000 − 10,000 = 5,000
Rate:
(10,000 × r × 5) / 100 = 5,000
r × 500 = 5,000
r = 10%
New Rate = 10% + 2% = 12%
New Simple Interest = (10,000 × 12 × 5) / 100 = ₹6,000