In how much time will a sum of Rs 500 become Rs 625 at 5% per annum simple interest?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → 5 years
The interest is the amount minus the principal, and from \(\displaystyle \mathrm{SI}=\frac{P\times R\times T}{100}\) the time is \(\displaystyle T=\frac{100\times\mathrm{SI}}{P\times R}\).
Interest \(=625-500=\) Rs 125
\(\displaystyle T=\frac{100\times125}{500\times5}=\frac{12500}{2500}=5\) years
The sum becomes Rs 625 in 5 years.