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Question : A person lent a certain sum of money at the annual rate of 5 percent on simple interest. In 4 years, the interest amounted to Rs. 800. What is the sum lent?

Option 1: Rs. 4,000

Option 2: Rs. 2,000

Option 3: Rs. 1,600

Option 4: Rs. 3,200


Team Careers360 24th Jan, 2024
Answer (1)
Team Careers360 25th Jan, 2024

Correct Answer: Rs. 4,000


Solution : Given: A person lent a certain sum of money at the annual rate of 5 percent on simple interest.
In 4 years, the interest amounted to Rs. 800.
Let the principal be $P$.
We know, Simple interest = $\frac{\text{Principal × Rate × Time}}{100}$
According to the question,
$800=\frac{P\times 5\times 4}{100}$
⇒ $P=\frac{80000}{20}=$ Rs. 4,000
Hence, the correct answer is Rs. 4,000.

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