Question : A person lent a certain sum of money at the annual rate of 7% on simple interest and the interest received in 11 years is Rs. 920 less than the sum lent. What is the sum lent?
Option 1: Rs. 41200
Option 2: Rs. 4000
Option 3: Rs. 52000
Option 4: Rs. 2400
Correct Answer: Rs. 4000
Solution :
Given, Rate = 7% and Time = 11 years
Let the amount lent be $P$.
Interest earned = $P - 920$
We know, Simple interest = $\frac{\text{Principal × Rate × Time}}{100}$
⇒ $P - 920 = \frac{P×7×11}{100}$
⇒ $100P - 92000 = 77P$
⇒ $100P - 77P = 92000$
⇒ $23P = 92000$
$\therefore P = 4000$
Hence, the correct answer is Rs. 4000.
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