Find a simple interest on ₹ 7200 for 7 years at a rate of 14% per annum.
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → ₹7,056
Simple interest is charged on the original sum only, the same amount every year: here 14% of ₹7200 for each of the 7 years. So \(\text{SI}=\displaystyle\frac{P\times R\times T}{100}\), where P is the sum lent, R the rate per cent a year and T the time in years.
Putting in \(P=7200\), \(R=14\) and \(T=7\): \(\text{SI}=\displaystyle\frac{7200\times14\times7}{100}\)
\(=72\times98=7056\), so the interest is ₹7,056