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What sum of money (in ₹) will yield ₹740 as simple interest in 2 years at 5% per annum?
6900
7600
7800
7400
7400
Calculate total percentage interest: 2×5=10%. Since 10% of the Principal P=740, then 100% of P=740×10=7400.
Simple Interest (SI) = ₹740, Time (T) = 2 years, Rate (R) = 5% per annum.
SI=100P×R×T
Calculate total percentage interest: 2×5=10%. Since 10% of the Principal P=740, then 100% of P=740×10=7400.
Confusing the total interest with the final amount (Principal + Interest) or misinterpreting the time period.
Identify given values
We are given the Simple Interest SI=740, time T=2 years, and rate R=5%.
SI=740,T=2,R=5
Rearrange the formula
The formula for Simple Interest is SI=100P×R×T. Solving for Principal P, we get P=R×TSI×100.
P=5×2740×100
Perform calculation
Simplify the denominator: 5×2=10. Then P=1074000=7400.
P=7400
D is correct because substituting the values into the formula yields a principal of ₹7400.
Understanding how to isolate variables in the Simple Interest formula helps directly in Compound Interest problems where the formula involves powers like A=P(1+100R)T.
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