Question

The interest earned on investing $\$1000$ for a period of $2$ years at a simple rate of interest of $10\text{\%}$ is

• A. $\$200$
• B. $\$400$
• C. $\$100$

Answer 1

The correct option is A $\$200$

Given Principal amount $=\$1000$
Rate of interest $=10\text{\%}$
Time for which the money is invested $=2$ years
$\therefore$ Using the formula for calculating simple interest
Simple Interest $=\frac{P\times R\times t}{100}$
$=\frac{1000\times 2\times 10}{100}=\$200$
Thus, $\$200$ is earned by simple interest.