Correct Answer - Option 1 : Rs. 700
Given:
Rate of interest = 12%
time = 3.5 years
Formula used:
Simple interest = (principal amount × rate of interest × time)/100
Calculation:
Let P be the principal amount
So, S.I. = 994 – P
⇒ 994 – P = (P × 12 × 3.5)/100
⇒ 99400 – 100P = 42P
⇒ 142P = 99400
⇒ P = 700 Rs
∴ The principal amount invested was Rs. 700.