Rs.700 amounts to Rs.742 in 2 years at a certain rate of simple interest. If interest rate is increased by 4% i.e. (R + 4%), then what will be the amount?a)Rs. 84b)Rs. 118c)Rs. 105d)Rs. 98Correct answer is option 'D'. Can you explain this answer?

Question

Answer

GIVEN:

Principal = Rs. 700

Amount = Rs. 742

Time = 2 years

FORMULA:

Interest = Amount – Principal

Simple Interest = P × R × T/100

CALCULATION:

Interest = 742 – 700 = 42,

(700 × R × 2)/100 = 42

⇒ R = 3%,

R increases by 7%

SI = (700 × 7 × 2)/100 = 98

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