Ravi borrowed Rs. 36000 from Akash at a simple interest of 8% per annum for a period of 4 years. Calculate the amount to be returned by Ravi to Akash after 4 years?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Rs. 47520
Simple interest is charged on the original sum only, so it is the same amount every year: \(\text{SI}=\frac{P\times R\times T}{100}\). The amount Ravi returns is the sum he borrowed plus this interest. Here \(P=36000\), \(R=8\) and \(T=4\).
Interest for the 4 years: \(\displaystyle\frac{36000\times8\times4}{100}=11520\)
Amount to be returned, sum plus interest: \(36000+11520=47520\), that is, Rs. 47520