A man earns Rs. 12,500 as simple interest at 5 percent per annum in 5 years. Find the principal amount deposited by the man in the bank.

ARs. 50,000 ✓ Correct

BRs. 45,000

CRs. 40,000

DRs. 35,000

Correct answer: (A) Rs. 50,000

Explanation

The principal is Rs 50000.

Simple interest = P x r x t / 100.

12500 = P x 5 x 5 / 100 = P x 25 / 100 = P / 4.

So P = 12500 x 4 = 50000.

Check: 50000 x 5 x 5 / 100 = 12500.

Method: rearrange the simple interest formula for P.

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