Multiple choice

Any sum invested for 3.5 years at 12% annual interest, at maturity becomes Rs. 994. What was the original amount invested?

  1. Rs. 700

  2. Rs. 750

  3. Rs. 725

  4. Rs. 720
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Using the simple interest formula A = P(1 + rt), where A is the maturity amount, P is the principal, r is the annual rate, and t is time in years. Given A = Rs. 994, r = 12% = 0.12, and t = 3.5 years: 994 = P(1 + 0.12 × 3.5) = P(1 + 0.42) = 1.42P. Therefore, P = 994/1.42 = Rs. 700.

Keep practicing — related questions