Question

On investing a certain amount of money in a mutual fund at an interest rate of 5% for a period of 5 years, simple interest obatined was ₹ 500. Find the orginal amount invested.

• A. ₹ 1000
• B. ₹ 2000
• C. ₹ 3000
• D. ₹ 1500

Answer 1

The correct option is B ₹ 2000

Given
Rate of interest (R) = 5%
Simple interest = ₹ 500
Time period(T) is 5 years.

Let the orginal amount invested be P

Now, by using Simple interest formula

Simple interest =$\frac{PRT}{100}$
₹ 500 = $\frac{P\times 5\times 5}{100}$
P = $\frac{500\times 100}{25}$
P = ₹ 2000

Hence, the orginal amount invested is ₹ 2000