Multiple choice

A farmer took a loan at 12% p.a. at Simple Interest. After 4 years he settled the loan by paying Rs. 2442. What was the principle amount?

  1. Rs. 1542

  2. Rs. 1600

  3. Rs. 1650

  4. Rs. 1550
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

With simple interest for four years at 12% per year, the total amount is P(1 + 0.12 × 4) = 1.48P. Therefore, P = 2442/1.48 = Rs. 1650.

AI explanation

Using the formula for amount under simple interest, A = P + (P * R * T) / 100, we can substitute the known values to get 2442 = P + (P * 12 * 4) / 100. This simplifies to 2442 = P + 0.48P, which is 1.48P = 2442. Solving for the principal gives P = 2442 / 1.48 = Rs 1650.

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