A certain sum of money is invested for one year at a certain rate of simple interest If the rate of ...........

Quantitative Aptitude ( CCS) Profit and loss

A certain sum of money is invested for one year at a certain rate of simple interest. If the rate of interest is 3% higher, then the invest earned will be 25% more than the interest earned earlier. What is the earlier rate of interest ?

12%

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Explanation:

If the interest earned is 25% more than the earlier interest then the rate of interest also should be 25% higher than the earlier rate.
Let the earlier rate of interest be x%.
Now it will be (x + 3)%
% increase = (x + 3) - x/x * 100 = 25
=> x = 12%

Hence, option 4 is the correct answer.