The rate of simple interest on a sum of money is 5% p.a. for the first 4 years, 8% p.a. for the next 3 years and 10% p.a. for the period beyond 7 years. If the simple interest accrued by the sum over a period of 10 years is Rs.1,850, then the sum is:
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e Rs.2,500
| Understanding | Application |
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For finding the simple interest rate ⇒ (principal × rate of interest × time) / 100 |
Let the principal amount be Rs. 'P' Simple interest for first 4 years ⇒ (P × 5 × 4) / 100 ⇒ 0.2P Simple interest for next 3 years ⇒ (P × 8 × 3) / 100 ⇒ 0.24P Simple interest for next 3 years ⇒ (P × 10 × 3) / 100 ⇒ 0.3P Total interest = 0.3P + 0.24P + 0.2P ⇒ 0.74P = 1850 ⇒ Rs. 2500 |