A certain sum at \(13\frac{1}{2}\)% per annum simple interest amounts to ₹2502.50 in 4 years. Find the sum.
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → ₹1625
Under simple interest the interest is the same every year, so in 4 years at \(13\frac{1}{2}\)% a year the sum earns \(4\times13.5=54\)% of itself. The amount is therefore 154% of the sum.
With the sum \(P\): \(\displaystyle\frac{154}{100}\times P=2502.50\)
\(\displaystyle P=\frac{2502.50\times100}{154}=1625\)