Question

What sum of money will earn ₹ 500 as simple interest in 1 year at 5% per annum?

(a) 50000

(b) 30000

(c) 10000

(d) 5000

Answer 1

(c) 10000

Let sum of money be ‘P’

Time ** (n) is given as 1 yr.

Rate of simple interest (r) is given as 5% p.a

∴ As per formula for simple interest.

*.I = (P x r x n)/100 = (p x 5 x 1)/100

P x 5 x 1 = 500 x 100

∴ P = (500×100)/5 = 100 x 100 = 10,000