Select the correct answerA sum was invested on simple interest at a certain rate for 2 years. Had it been put at 3% higher rate, it would have fetched 72 more. The sum is
Question
Select the correct answerA sum was invested on simple interest at a certain rate for 2 years. Had it been put at 3% higher rate, it would have fetched 72 more. The sum is
Solution
The problem is asking for the original sum of money that was invested. We know that the difference in interest from the original rate and the rate that is 3% higher over 2 years is $72.
The formula for simple interest is I = PRT, where I is interest, P is the principal amount (initial investment), R is the rate of interest, and T is time in years.
We can set up the equation like this:
P * R * 2 + P * 0.03 * 2 = P * R * 2 + 72
Solving for P, we get:
P = 72 / (0.03 * 2)
P = 72 / 0.06
P = 1200
So, the original sum that was invested is $1200.
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