Ravi borrowed $5,000 from a bank at an interest rate of 6% per annum for 4 years. Calculate the simple interest and the total amount he has to repay after 4 years.
Show answer & explanation
Correct answer: B
Explanation
Principal (P) = 5000, Rate (R) = 6%, Time (T) = 4 years
According to the formula:
Simple Interest = (P × R × T) / 100
Simple Interest = (5000 × 6 × 4) / 100 = 1200
Total Amount = 5000 + 1200 = 6200
Simple Interest = $1200; Total = $6200