Question

A person invests Rs 5000 at a simple interest rate of 8 % per annum for 3 years. What is the total interest earned by the person at the end of the period?

• A. Rs 1000
• B. Rs 1200
• C. Rs 1400
• D. Rs 1600

Hint:

Remember: For simple interest, use the formula \( \text{SI} = \frac{\text{P} \times \text{R} \times \text{T}}{100} \). Ensure the rate is in percentage and time is in years.

Answer 1

The Correct Option is B

To solve the problem, we need to calculate the simple interest earned over a period based on the principal amount, rate of interest, and time.

1. Understanding the Concepts:

- Principal (P): The initial amount invested.
- Rate of Interest (R): The annual rate at which interest is earned.
- Time (T): The duration for which the money is invested (in years).
- Simple Interest (SI): The interest earned over the period, calculated as: \( \text{SI} = \frac{P \times R \times T}{100} \)

2. Given Values:

\( P = \text{Rs } 5000 \)
\( R = 8\% \text{ per annum} \)
\( T = 3 \text{ years} \)

3. Calculating the Simple Interest:

\[ \text{SI} = \frac{5000 \times 8 \times 3}{100} = \frac{120000}{100} = \text{Rs } 1200 \]

Final Answer:

The total interest earned by the person at the end of the period is Rs 1200.