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A sum of Rs 600 amounts to Rs 720 in 4 years. What will it amount to, if the rate of the interest is increased by 2%?

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Rs 724

Rs 648

Rs 768

Rs 744

answer is C.

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Detailed Solution

Given that,
Amount = Rs. 720
P = Rs. 600
T = 4 years
Rate increased = 2%
Formula for simple interest,

S . I = P × R × T 100

Where, S.I is simple interest.
P=principal.
R=rate percent.
T=time.
Formula for amount,
Amount

= Sum + S .I .

Assume the rate as r%.
Apply formula,
Amount

= Sum + S .I .

∴ S . I = A − P ⇒ S . I = 720 − 600 ⇒ S . I = R s .120

Calculating r%,

S . I = P × R × T 100

⇒ 120 = 600 × 4 × r 100 ⇒ r = 120 × 100 600 × 4 ⇒ r = 12024 ⇒ r = 5 %

We are given that, the rate is increased by 2%.

∴ r = 5 + 2 % ⇒ r = 7 %

Now to calculate the simple interest, we apply the formula,

S . I = P × R × T 100

⇒ S . I = 600 × 7 × 4 100 = 6 × 7 × 4 = R s .168

Now, we calculate the amount using the formula,
Amount

= Sum + S .I .

⇒ Amount = 600 + 168 = R s .768

Hence, the correct option is 3.

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