Multiple choice

Determine the principal when time $= 2$ years, interest $=$ Rs. $ 1000$; rate $= 5\%$ p.a.

  1. Rs. $10000$
  2. Rs. $20000$
  3. Rs. $30000$
  4. Rs. $40000$
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A Correct answer
Explanation

Simple interest formula: I = (P * R * T) / 100. 1000 = (P * 5 * 2) / 100. 1000 = P * 10 / 100. 1000 = P / 10. P = 10,000.

AI explanation

Using the simple interest rearrangement where Principal equals Simple Interest times 100 divided by the product of Rate and Time, we substitute the given values. This gives Principal equals 1000 times 100 divided by the product of 5 and 2. The calculated principal is Rs. 10000.

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