Multiple choice

Vipin invested a sum of money at an annual simple interest rate of 10%. At the end of four years the amount invested plus interest earned was Rs.7700. The amount invested was

  1. Rs.5500

  2. Rs.6500

  3. Rs.5000

  4. Rs.3500
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A Correct answer
Explanation

For simple interest, Amount = Principal + Interest. Interest = P × r × t/100 = P × 10 × 4/100 = 0.4P. Therefore, Amount = P + 0.4P = 1.4P = Rs.7700. Solving: P = 7700/1.4 = Rs.5500.

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