Question

A man invests Rs. 5000 at 5% simple interest per annum. How much interest will he earn after 3 years?

• A. Rs. 750
• B. Rs. 800
• C. Rs. 850
• D. Rs. 900

Hint:

For simple interest, use $I = \dfrac{P \times R \times T}{100}$ directly and confirm units match the options.

Answer 1

The Correct Option is A

- Step 1: Simple interest formula: $I = \dfrac{P \times R \times T}{100}$.
- Step 2: Given $P = 5000$, $R = 5%$, $T = 3$ years.
- Step 3: Calculate: $I = \dfrac{5000 \times 5 \times 3}{100} = 750$.
- Step 4: Verify: Interest per year = $\dfrac{5000 \times 5}{100} = 250$, so for 3 years, $250 \times 3 = 750$.
- Step 5: Check options: Option (a) is Rs. 750, which matches.
- Step 6: Ensure no compound interest confusion, as question specifies simple interest.