A sum of Rs.7500 amounts to Rs.9075 at 10%p.a; interest being compounded yearly at a certain time. The simple interest (in Rs) on the same sum for the same time and the same rate is :
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. 1500.
Given :
Amount (A) = Rs 9075
Principal (P) = Rs 7500
Rate (R) = 10%
Formula used :
A = P (1 + R/100)t ----- (1)
Simple interest = (PRt)/100 ---- (2)
Calculations :
Using equation (1)
⇒ 9075 = 7500(1 + 10/100)t
⇒ 9075/7500 = (11/10)t
⇒ 121/100 = (11/10)t
⇒ (11/10)2 = (11/10)t
⇒ t = 2 years
Now, using equation (2), we get
Simple interest = (7500 × 2 × 10)/100 = 1500