Question

Neha receives Rs. 3870 as simple interest when she invested certain sum of money at 9% rate of interest for 5 years. Find principal amount invested.

1. Rs. 7800
2. Rs. 8600
3. Rs. 7200
4. Rs. 7600

Answer 1

Correct Answer - Option 2 : Rs. 8600

Given:

I = Rs. 3870

N = 5

R = 9%

Formula used:

I = P × R × N/ 100

A = P + I

Where, P = Principal amount, R = Rate of interest, N = number of years and I = Simple interest

Calculation:

3870 = P × 9 × 5/ 100

⇒ P = 3870 × 100/ 45

⇒ P = 86 × 100

∴ P = Rs. 8600