Question : A sum becomes INR 27,720 in 7 years at the rate of 14 % per annum on simple interest. What is the sum?
Option 1: INR 13,000
Option 2: INR 14,700
Option 3: INR 15,000
Option 4: INR 14,000
Correct Answer: INR 14,000
Solution :
Let $P$ be the Principal.
Simple Interest, SI = Amount – principal = $27720 – P$
Simple Interest = $\frac{\text{Principal × term × Rate}}{100}$
⇒ $27720 – P$ = $\frac{P×7×14}{100}$
⇒ $2772000$ = $98P + 100P$
⇒ $P$ =$\frac{2772000}{198}$ = INR 14,000
Hence, the correct answer is INR 14,000.
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