A person lent a certain sum of money at the annual rate of 25 percent on simple interest. In 6 years the interest amounted to Rs.360 more than the sum lent. What is the sum lent?
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. Rs.720.
Let's assume that the principal amount that was lent is 'P'.
The annual rate of interest is 25%, which means the interest for a year would be 0.25P.
Since the interest is simple interest, the interest for 6 years would be 6 times the interest for a year, i.e., 1.5P.
According to the problem, the interest for 6 years amounted to Rs.360 more than the sum lent. So we can write the equation:
1.5P = P + 360
Simplifying this equation, we get:
0.5P = 360
P = 720
Therefore, the sum lent was Rs.720.