In how many years will a sum of ₹5,000 yield a simple interest of ₹2,000 at an interest rate of 10% p.a.?
Answer & explanation
Correct answer: option 3
Principal = Rs.5000
Rate of Interest = 10% p.a.
Simple Interest in 1 year = 5000 × 10% = Rs.500
We need Rs.2000 as simple interest,
So it will be in = 500 × t = 2000
t = \(\frac{2000}{500}\) = 4 years
Alternate :
We know ,
Simple Interest = \(\frac{Principal ×Rate × Time }{100}\)
2000 = \(\frac{5000 × 10 × Time }{100}\)
2 = \(\frac{5 × 10 × Time }{100}\)
Time = 4 years