Simple Interest on a certain sum of money 2\;1/2 years at 3\;1/4 \% p.a. is {Rs.} 390

Correct Answer is : Rs.4,800{Rs.} 4,800Rs.4,800

Correct Answer is : Rs.4,800{Rs.} 4,800Rs.4,800

Test Index

Time Value of Money

Question : 35 of 99

Marks: +1, -0

2\;\frac{1}{2}

3\;\frac{1}{4} \%

\text{Rs.} 390

Solution:

Concept:

Use the simple interest formula to find the principal.

Explanation:

Simple interest (SI) is given by:

SI = \frac{P \times R \times T}{100}

Here,

SI = 390

R = 3\frac{1}{4} = \frac{13}{4}\%

T = 2\frac{1}{2} = \frac{5}{2}

years.

Rearrange to find

P

P = \frac{SI \times 100}{R \times T}

Substitute the values:

P = \frac{390 \times 100}{\frac{13}{4} \times \frac{5}{2}} = \frac{39000}{\frac{65}{8}} = 39000 \times \frac{8}{65}

Simplify:

39000 \div 65 = 600

, then

600 \times 8 = 4800

Thus, the sum is ₹4800.

Answer:

₹ 4,800

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