Multiple choice

A sum of money becomes Rs. 385 in 5 years at the rate of 8% per annum simple interest. Original sum was -

  1. Rs. 240

  2. Rs. 260

  3. Rs. 250

  4. Rs. 275
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Using simple interest formula: Amount = Principal(1 + rt). Here Amount = Rs. 385, rate r = 8% = 0.08, time t = 5 years. Substituting: 385 = P(1 + 0.08 × 5) = P(1 + 0.40) = P(1.40). Solving: P = 385/1.40 = 3850/14 = 275. The original principal sum was Rs. 275. The interest earned is Rs. 385 - Rs. 275 = Rs. 110, which checks out: 275 × 0.08 × 5 = 110.

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