If Anita took a loan of Rs.1000 at the rate of 5% per annum for 2 years, what…
2025
If Anita took a loan of Rs.1000 at the rate of 5% per annum for 2 years, what is the interest she has to pay after this time?
- A.
400
- B.
200
- C.
600
- D.
100
Show answer & explanation
Correct answer: D
Simple Interest (SI) is the interest calculated only on the original principal amount for the entire loan period, using the formula SI = (Principal × Rate × Time) / 100, where Rate is the annual percentage rate and Time is in years.
Identify the given values: Principal (P) = Rs. 1000, Rate (R) = 5% per annum, Time (T) = 2 years.
Substitute these values into the Simple Interest formula: SI = (P × R × T) / 100 = (1000 × 5 × 2) / 100.
Simplify the numerator first: 1000 × 5 × 2 = 10000.
Divide by 100 to get the interest: SI = 10000 / 100 = 100.
Cross-check using the amount formula: Amount A = P × (1 + (R × T)/100) = 1000 × (1 + 10/100) = 1000 × 1.10 = 1100. Since Interest = Amount − Principal, Interest = 1100 − 1000 = 100, confirming the result.
