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What sum will earn a simple interest of ₹1,056 in 3 years at 16% per year rate of interest?
₹2,200
₹1,600
₹2,000
₹1,800
₹2,200
Calculate total percentage interest: 16% × 3 years = 48%. Divide the interest amount by the percentage: 1056 / 0.48 = 2200.
Simple Interest (SI) = ₹1,056, Time (T) = 3 years, Rate (R) = 16% per annum.
SI=100P×R×T⟹P=R×TSI×100
Calculate total percentage interest: 16% × 3 years = 48%. Divide the interest amount by the percentage: 1056 / 0.48 = 2200.
Confusing 'Simple Interest' with 'Compound Interest' or failing to multiply the rate by the number of years correctly.
Identify Given Values
Extract the given parameters from the problem: Simple Interest (SI) = ₹1,056, Rate (R) = 16%, and Time (T) = 3 years.
SI=1056,R=16,T=3
Apply Formula
Use the standard Simple Interest formula SI=100P×R×T and rearrange it to solve for Principal (P).
P=16×31056×100
Simplify and Solve
First divide 1056 by 3, which gives 352. Then divide 352 by 16, which gives 22. Multiply by 100 to get the final sum.
P=16352×100=22×100=2200
A is correct because the principal sum calculated using the SI formula is ₹2,200.
This concept is fundamental for Profit & Loss and Compound Interest topics; always remember that Simple Interest is only calculated on the original Principal amount every year.
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