Correct Answer - Option 1 : 1 year
Given:
Principle = Rs. 5000
Simple interest = Rs. 2000
Rate = 40%
Concept:
Simple interest is the interest calculated on the principal portion of the loan or the original contribution to the saving account.
Formula Used:
Simple Interest = (P × R × T)/100
Calculation:
Simple Interest = (P × R × T)/100
⇒ 2000 = (5000 × 40 × T)/(100)
⇒ T = 200000/200000 = 1 year
∴ In 1 year interest on Rs. 5000 will be Rs.2000 at the simple interest rate of 40%.
