Find the value of the interest earned on a sum of ₹6,000 for 5 years at an 8.4% simple interest rate per annum.
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. ₹2,520
Simple interest is calculated using the formula I = P × R × T, where I is the interest earned, P is the principal (the initial amount of money), R is the interest rate, and T is the time period.
Given that the principal is ₹6,000, the interest rate is 8.4%, and the time period is 5 years, we can substitute these values in the formula to find the interest earned:
I = 6000 × 0.084 × 5
I = ₹2,520
Therefore, the interest earned on a sum of ₹6,000 for 5 years at an 8.4% simple interest rate per annum is ₹2,520.