Question

Loan at 12% SI for 3 years gives Rs. 5400 interest. Find principal.

• A. Rs.2000
• B. Rs.10000
• C. Rs.15000
• D. Rs.20000

Hint:

Remember the simple interest formula and be able to rearrange it to find any variable. Always double-check that the rate and time units are consistent (e.g., rate per annum, time in years).

Answer 1

The Correct Option is C

Step 1: Find the interest earned in one year.
The total simple interest over 3 years is Rs. 5400, and simple interest is the same for every year, so the interest for one year is \( \frac{5400}{3} = 1800 \).

Step 2: Connect this yearly interest to the rate.
Since the rate is 12% per annum, the yearly interest of Rs. 1800 must equal 12% of the principal \( P \), so \[ \frac{12}{100} \times P = 1800 \]

Step 3: Solve for the principal.
\[ P = \frac{1800 \times 100}{12} = \boxed{15000} \]