Correct Answer - Option 1 : Rs. 15500
Given:
Simple interest = Rs. 3720
Time (T) = 3 years
Rate (R) = 8%
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:
Let the principal be 'P'
Simple Interest = (P × R × T)/100
⇒ 3720 = (P × 8 × 3)/(100)
⇒ 3720 = 24P/100
⇒ P = 372000 ÷ 24
⇒ P = Rs. 15500
∴ The principal or the amount borrowed from the bank is Rs. 15500.