Multiple choice

Mr. Brandon, a private financier, loaned a certain amount to Mr. Benjamin for his house renovation at the rate of 5% simple interest. Mr. Benjamin never paid a single penny for five years to Mr. Brandon, and he owed $20,000 worth of interest for those years. How much amount does Mr. Benjamin have to return to Mr. Brandon to clear all his dues?

  1. $80,000.00
  2. $90,000.00
  3. $95,000.00
  4. $100,000.00
  5. $120,000.00
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Simple interest I = P * R * T / 100. 20,000 = P * 0.05 * 5. 20,000 = 0.25P. P = 80,000. Total amount to return = Principal + Interest = 80,000 + 20,000 = 100,000.

AI explanation

First, find the principal amount using the simple interest formula, where interest equals principal multiplied by rate and time. We have 20000 equals P times 0.05 times 5, which simplifies to 20000 equals 0.25P, meaning the principal is 80000. To clear all his dues, Mr. Benjamin must return the principal plus the total interest, so 80000 plus 20000 equals 100000.

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