Question

If a certain sum of money borrowed at 5% per annum simple interest amounts to Rs 1020 in 4 years, then the sum of money borrowed is:

• A. Rs 850
  
• B. Rs 925
  
• C. Rs 750
  
• D. Rs 875
• E. None of these

Answer 1

The correct option is A Rs 850


We have, A =Rs 1020, T =4 years, R =5% p.a.
Let, the principal be Rs x.
Then, Interest (I) =A-P =1020 -x.
Therefore, by using formula.
$P=\frac{100\times I}{R\times T}$
We have, $x=\frac{100\times (1020-x)}{5\times 4}$
$\Rightarrow$ x =5100-5x or, 6x =5100
or, $x=\frac{5100}{6}=Rs850.$
$\therefore$ The sum of money borrowed =Rs 850.