A sum of money becomes Rs.34800 in 2 years and Rs.42000 in 5 years at simple interest per annum. Find the rate of interest and the sum of money respectively.

A6%, Rs.40000

B7%, Rs.30000

C8%, Rs.30000 ✓ Correct

D5%, Rs.35000

Correct answer: (C) 8%, Rs.30000

Explanation

The rate is 8% and the sum is Rs. 30000.

Interest over the 3 years between readings = 42000 - 34800 = 7200.

Yearly interest = 7200 / 3 = 2400.

Sum = 34800 - 2 x 2400 = 34800 - 4800 = 30000.

Rate = 2400 / 30000 x 100 = 8%.

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