Question

Aman took loan from a bank at the rate of 6% p.a. simple interest. After 5 years he had to pay Rs. 1,080 interest only for the period. The principal amount borrowed by him was:

1. Rs. 3,600
2. Rs. 3,800
3. Rs. 4,000
4. Rs. 4,500

Answer 1

Correct Answer - Option 1 : Rs. 3,600

Given:

Rate of interest is 6%

SI is 1,080

Time is 5 years

Formula:

SI = (P × N × R)/100,

Where,

P is a principle,

SI is simple interest,

N is the total number of years,

R is rate

Calculations:

Using the formula,

⇒ 1,080 = (P × 5 × 6)/100 

⇒ 1,080 = 30P/100

⇒ P = (1,080 × 100)/30

⇒ P = 3,600 

∴ Principal amount borrowed by Aman was Rs. 3,600.