A sum of Rs 9500 amounts to Rs11495 in 2 years at a certain rate percent per annum, interest compounded yearly. What is the simple interest (in Rs ) on the same sum for the same time and double the rate?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. 3800
A = P(1 + r/100)n
11495 = 9500(1 + r/100)2
11495/9500 = (1 + r/100)2
11/10 = 1 + r/100
1/10 = r/100
r = 10%.
SI on the same sum for the double rate of interest = (9500 × 20 × 2)/100
= 3800.