What sum of money amounts to Rs. 2,600 in 2 years and to Rs. 2,700 in 3 years at a fixed rate of simple interest annually?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. Rs. 2,400.
A = P + (P × R × T)/100
For 2 years: P + (2PR)/100 = 2600 .....(1)
For 3 years: P + (3PR)/100 = 2700 .....(2)
From (1) and (2), we get PR = 10000
Substitute PR = 10000 in equation (1),
P + (2 × 10000)/100 = 2600
⇒ P = 2600 - 200 = 2400