Test Index

Time Value of Money

© examsnet.com

Question : 33 of 99

Marks: +1, -0

What sum of money will produce 28,600 interest in 3 yrs & 3 months at

2.5 \%

p.a. simple interest?

$\text{Rs. 3,52,000}$
$\text{Rs. 3,65,000}$
$\text{Rs. 3,25,000}$
$\text{Rs. 3,56,000}$

Solution:

Concept:

Use the simple interest formula

SI = \frac{P \times R \times T}{100}

to solve for principal

P

.

Explanation:

Given:

SI = 28600

,

R = 2.5\%

per annum,

T = 3

years

3

months

= 3.25

years.

Rearrange formula:

P = \frac{SI \times 100}{R \times T}

.

Substitute values:

P = \frac{28600 \times 100}{2.5 \times 3.25}

.

Calculate denominator:

2.5 \times 3.25 = 8.125

.

Numerator:

28600 \times 100 = 2,860,000

.

Divide:

P = \frac{2,860,000}{8.125} = 352,000

.

Answer:

The sum of money is ₹3,52,000.

© examsnet.com

Go to Question:

Prev Question

Next Question