Question

The sum which will earn a simple interest of $Rs\,126$ in $2$ years at $14\% $ per annum is
A. $Rs394$
B. $Rs\,395$
C. $Rs\,450$
D. $Rs\,540$

Answer 1

Hint: In this question we have to find the sum which is the principal. We have been given the interest in the question and we have time and rate of interest. So we will directly apply the formula of simple interest and then solve this question. We know that the formula of calculating simple interest is $Interest = \dfrac{{P \times R \times T}}{{100}}$ .

Complete answer:
According to the question, we have been simple interest i.e.
$S.I = Rs\,126$
Also we have the time and rate of interest i.e.
$R = 14\% ,T = 2$
By substituting all the values in the formula we have:
$ \Rightarrow 126 = \dfrac{{P \times 14 \times 2}}{{100}}$
ON cross multiplying the values, we have:
$ \Rightarrow P = \dfrac{{126 \times 100}}{{14 \times 2}}$
We will now solve this and we have:
$ \Rightarrow P = Rs\,450$

Therefore, the correct option is C

Note: We should keep in mind the concept of simple interest and compound interest. The simple interest is charged on borrowed amount or interest on invested amount for entire period while the compound interest is calculated on the amount that includes the principal plus accumulated interest of previous period.