Question

What sum of money will earn an interest of $₨160$ at the rate of $4\%$ per year for $2$years ?

Answer 1

Given:

Simple interest $=₨160$

Rate of Interest $=4\%$ p.a

Time$=2$years

Let Principal $=₨\mathrm{P}$

We know that

Simple interest $=\frac{\mathrm{P}\times \mathrm{R}\times \mathrm{T}}{100}$

Then,

$160=\frac{\mathrm{P}\times 4\times 2}{100}$
$$\begin{gathered} \Rightarrow \mathrm{P}=\frac{160\times 100}{4\times 2} \\ \Rightarrow \mathrm{P}=20\times 100 \\ \Rightarrow \mathrm{P}=2000 \end{gathered}$$

Hence, the principal is $₨2000$.