The simple interest on a given sum of money for two years would have been Rs.240 more had the rate of interest per annum been 3% higher. Find the initial sum invested.

Correct option is C

Given:

Increase in interest = Rs. 240 for 2 years when rate increased by 3%.

Formula Used:

Simple Interest (SI) = $$\frac{(Principal × Rate × Time) }{100}$$​

Solution:

Let the initial sum be P.

For a 3% increase for 2 years, extra interest = 240

=>$$\frac{(P × 3 × 2)} { 100}$$​ = 240

=> $$\frac{(P × 6)} { 100}$$​= 240

=> P × 6 = 24000

=> P = $$\frac{24000} 6$$​

=> P = 4000

Therefore, the initial sum invested was Rs. 4000.