If the simple interest on a certain sum of money for 4 years at the rate of 12.5% is Rs. 400 less than its principal. Find the sum.
1. 700 Rs.
2. 400 Rs.
3. 1200 Rs.
4. 800 Rs.
1. 700 Rs.
2. 400 Rs.
3. 1200 Rs.
4. 800 Rs.
Correct Answer – Option 4 : 800 Rs.
Given:
Time = 4 years
Rate = 12.5%
Formula used:
Amount = Simple interest + Principal
SI = (P x R x T)/100
where P = Principal,
R = Rate of Interest,
T = Time Period of the Loan/deposit in years,
SI = Simple Interest
Calculations:
Let, the principal is P
SI = (P x R x T)/100
⇒ P – 400 = (P × 4 × 12.5)/100
⇒ P – 400 = P × 4 × (1/8)
⇒ P – 400 = P/2
⇒ 2P – 800 = P
⇒ P = 800 Rs.
∴ The sum is 800 Rs.