Simple Interest – Find original principal from amount: At 5% per annum simple interest, a sum of money amounts to Rs 900 in 4 years. Find the original principal (sum).
Aptitude
Simple Interest
Difficulty: Easy
Choose an option
Answer
Correct Answer: Rs 750
Explanation
Introduction / Context:Given the final amount under simple interest, we can recover the principal using the linear growth model A = P * (1 + r * t).
Given Data / Assumptions:
- A = Rs 900
- r = 5% per annum
- t = 4 years
Concept / Approach:Under SI, A = P * (1 + r * t). Rearranging, P = A / (1 + r * t). Use r = 0.05, t = 4.
Step-by-Step Solution:
1 + r * t = 1 + 0.05 * 4 = 1.20P = 900 / 1.20 = Rs 750Verification / Alternative check:
Check: SI = P * r * t = 750 * 0.05 * 4 = 150; A = 750 + 150 = 900 (consistent)Why Other Options Are Wrong:
- Rs 650 / Rs 550 / Rs 500 / Rs 800: do not satisfy A = 900 under 5% for 4 years.
Common Pitfalls:
- Mistaking compound interest for simple interest.
- Forgetting to convert percent to decimal.
Final Answer:Rs 750.