Question

What is the simple interest on Rs. 500 borrowed at 8\% per annum for 3 years?

• A. Rs. 120
• B. Rs. 140
• C. Rs. 160
• D. Rs. 180

Hint:

Use the formula \( \text{SI} = \frac{P \times R \times T}{100} \) for quick simple interest calculations.

Answer 1

The Correct Option is A

The formula for calculating Simple Interest (SI) is given by: \[ \text{SI} = \frac{P \times R \times T}{100} \] Here, \(P = Rs. 500\) represents the Principal amount. \(R = 8\%\) is the annual Rate of interest. \(T = 3\) years is the Time period. By substituting these values into the formula: \[ \text{SI} = \frac{500 \times 8 \times 3}{100} = \frac{12000}{100} = Rs. 120 \] Consequently, the simple interest amounts to Rs. 120.