Question

Simple Interest on a sum for 2 years at 10% per annum is \rupee 400. What is the principal amount?

• A. \rupee 1000
• B. \rupee 1500
• C. \rupee 2000
• D. \rupee 2500

Hint:

Simple interest is directly proportional to time and rate. If the total interest for 2 years at 10% is 20% of the principal, then 20% of \( P = 400 \). Therefore, \( P = 400 / 0.2 = 2000 \).

Answer 1

The Correct Option is C

Step 1: Understanding the Question:
We are given the Simple Interest (SI), time (T), and rate (R), and we need to find the Principal (P).

Step 2: Key Formula or Approach:
The formula for Simple Interest is: \[ SI = \frac{P \times R \times T}{100} \]

Step 3: Detailed Explanation:
Given: - \( SI = 400 \)
- \( T = 2 \) years
- \( R = 10\% \)
Substituting these values into the formula: \[ 400 = \frac{P \times 10 \times 2}{100} \] \[ 400 = \frac{20P}{100} \] \[ 400 = \frac{P}{5} \] Rearranging for P: \[ P = 400 \times 5 = 2000 \]

Step 4: Final Answer:
The principal amount is \rupee 2000.