Simple interest is computed using the formula I = (P × R × T) ÷ 100. Substituting the given values P = 5,000, R = 8% and T = 3 years gives I = (5,000 × 8 × 3) ÷ 100. The product 5,000 × 8 × 3 is 120,000, and dividing by 100 yields 1,200. Therefore, the simple interest over 3 years is ₹1,200.
Option A:
Option A, ₹1,000, corresponds to a lower effective rate or shorter time period and does not match the product in the interest formula. It underestimates the interest earned.
Option B:
Option B, ₹1,100, is not an exact multiple of P × R × T ÷ 100 and therefore cannot result from correctly applying the formula.
Option C:
Option C aligns perfectly with the given parameters. It reflects three years of interest at 8% per annum on ₹5,000 and matches both the multiplication and division steps.
Option D:
Option D, ₹1,300, overstates the interest and could only be obtained by using a higher rate or an additional year, neither of which is specified.
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