Aman deposited ₹ 10,000 at simple interest in a fund. The interest rate on the fund increases by 4% every year. If the interest rate at the time of the amount deposit was 8%. What is the interest eared (in ₹) by him after 5 years?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is Option 4 i.e. 8,000.
Given that
Aman deposited ₹ 10,000 at simple interest in a fund
The rate of interest = 8% p.a.
The interest increases by 4% every year
Time = 5 years
Formula used
S.I. = PRT/100
P = Principal, R = rate of interest, T = time
According to the question
For the 5 years, the rate of interest = 8%, 12%, 16%, 20%, and 24% consecutively
Total S.I. after 5 years = 10000 × 8/100 + 10000 × 12/100 + 10000 × 16/100 + 10000 × 20/100 + 10000 × 24/100
= 800 + 1200 + 1600 + 2000 + 2400
= ₹ 8000