Question

Rahim Chacha borrowed rupees 25000 at 12 p.c.p.a. for a year. What amount will he have to return to the bank at the end of the year?

• A. ₹20000
• B. ₹32500
• C. ₹40000
• D. ₹28000

Answer 1

The correct option is D ₹28000

Let us suppose that the interest on the principal of ₹25000 is x. On principal ₹100, the interest is ₹12.
We shall take the ratio of interest to principal, write it in two forms and obtain an equation.
$\frac{x}{25000}=\frac{12}{100}$
$x=\frac{12}{100}\times 25000=3000$
Therefore, Amount = Principal + Interest
= 25000 + 3000
= 28000 rupees
Hence, Rahim Chacha will have to return 28000 rupees to the bank at the end of the year.