A certain sum of money at a certain annual rate of interest becomes Rs. 1008 in 2 years and Rs. 1164 in 3 and a half years under simple interest. Find the sum and the annual rate of interest.

ARs. 800, 12%

BRs. 875, 12.5%

CRs. 850, 12%

DRs. 800, 13% ✓ Correct

Correct answer: (D) Rs. 800, 13%

Explanation

The sum is Rs. 800 at 13% per annum.

Amount rose 1164 - 1008 = 156 over 1.5 years.

Yearly interest = 156 / 1.5 = 104.

Interest for 2 years = 208, so principal = 1008 - 208 = 800.

Rate = (104 / 800) x 100 = 13%.

Want more like this? Create a free account to practise a full test, track your progress, and get spaced-repetition review.