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
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