Question : R wants to deposit Rs. 80,000 in the bank for a year. For his account, the bank gives 12% simple annual interest but charges Rs. 3,000 as a processing fee. What would be his percentage earnings in the account?
Option 1: 8.75%
Option 2: 9%
Option 3: 8.5%
Option 4: 8.25%
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Correct Answer: 8.25%
Solution :
Simple interest = $\frac{\text{Principal × Rate × Time}}{100}$
Simple interest on Rs. 80000 in 1 year at the rate of 12% $=\frac{80000 × 12 × 1}{100} = 9600$
The bank takes Rs. 3000 as a processing charge.
So, net profit for R = (9600 – 3000) = Rs. 6600
So, his profit percentage $=\frac{6600 × 100}{80000} = 8.25$%
Hence, the correct answer is 8.25%.
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