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Ramesh has borrowed an amount of ₹2,00,000 from a bank to start a business. How much simple interest will he pay at a rate of 11% per annum after 2 years?
₹44,000
₹44,600
₹45,500
₹46,000
₹44,000
Calculate 11% of 2,00,000 which is 22,000, then multiply by 2 (the time period) to get 44,000.
Principal (P) = ₹2,00,000, Rate (R) = 11% per annum, Time (T) = 2 years
SI=100P×R×T
Calculate 11% of 2,00,000 which is 22,000, then multiply by 2 (the time period) to get 44,000.
Confusing Simple Interest (SI) with Amount (A = P + SI). If the question asked for the total amount, it would be 2,44,000.
Identify Given Parameters
We have the Principal P=2,00,000, Rate R=11%, and Time T=2 years.
P=2,00,000,R=11,T=2
Apply Simple Interest Formula
Use the standard formula to calculate the interest.
SI=1002,00,000×11×2
Calculation
Cancel the zeros: 2,000×11×2=22,000×2=44,000.
SI=44,000
A is correct because the Simple Interest calculated for the given principal, rate, and time is ₹44,000.
This method is the foundation for Compound Interest calculations; always ensure you distinguish whether the interest is calculated annually or for a specific period.
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