PREVIOUSLY ASKED IN:
PSC Miscellaneous Prelims 2018
Answer
Rs. 500
Explanation
The basic formula for calculating Simple Interest is: I = (P × R × T) / 100. Given values: Simple Interest (I) = Rs. 50, Rate of Interest (R) = 5% p.a., Time (T) = 2 years. We need to find the Principal (P). Substituting the values in the formula: 50 = (P × 5 × 2) / 100 => 50 = (10P) / 100 => P = (50 × 100) / 10 => P = 500. Therefore, the principal sum is Rs. 500.
Key Points
- > Simple Interest formula: SI = (P × R × T) / 100.
- > Derived formula for Principal: P = (SI × 100) / (R × T).
- > Plugging in values: P = (50 × 100) / (5 × 2).
- > P = 5000 / 10 = Rs. 500.
- > In Simple Interest, the interest earned each year remains constant.
- > Here, interest for 2 years is 50, meaning interest per year is 25 (which is 5% of 500).
Additional Information
Simple Interest Formula Matrix
| To Find | Formula to Use |
|---|---|
| Simple Interest (I) | (P × R × T) / 100 |
| Principal (P) | (I × 100) / (R × T) |
| Rate of Interest (R) | (I × 100) / (P × T) |
| Time Period (T) | (I × 100) / (P × R) |
Memory Tips
- Mental Math Shortcut: 5% per year for 2 years means total interest is 10% of the principal. The problem states this 10% is equal to Rs. 50. If 10% = 50, then 100% (the full principal) = Rs. 500.