Question

A man invests Rs. 10,000 at 5% simple interest per annum. What is the interest earned after 2 years?

• A. Rs. 1,000
• B. Rs. 1,200
• C. Rs. 1,500
• D. Rs. 2,000

Hint:

For simple interest, use \frac{P \times R \times T}{100} and verify yearly interest.

Answer 1

The Correct Option is A

To determine the interest earned on an investment using simple interest, we use the formula 

Simple Interest (SI) = (Principal × Rate × Time) / 100.

Here, the Principal (P) is Rs. 10,000, the Rate (R) is 5% per annum, and the Time (T) is 2 years.

Plugging these values into the formula:

SI = (10,000 × 5 × 2) / 100

Calculate the result:

SI = (100,000) / 100 = Rs. 1,000

Therefore, the interest earned after 2 years is Rs. 1,000.