A sum of money, when invested at simple interest, amounts to ₹12,000 in 4 years and ₹15,000 in 7 years. What is the original principal amount?
Show answer & explanation
Correct answer: B
Explanation
Given:
Amount after 4 years = ₹12,000
Amount after 7 years = ₹15,000
According to the formula:
In Simple Interest, the interest accrued over equal periods of time is equal.
Amount after 7 years − Amount after 4 years = Interest for 3 years
15,000 − 12,000 = 3,000
Interest for 3 years = ₹3,000
Interest for 1 year = 3,000 / 3 = ₹1,000
Interest for 4 years = 4 × 1,000 = ₹4,000
Principal = 12,000 − 4,000 = 8,000
Principal = ₹8,000