Priya invested ₹3200 in a bank at a simple interest rate of 12% per annum. If she kept her money in the bank for 5 years, what will be the total interest earned?
- AOption (a)
₹1910
- BOption (b)
₹1930
- COption (c)
₹1920
- DOption (d)
₹1940
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Correct answer
₹1920
Why this answer is correct
Shortcut Trick
Total interest percentage for the entire duration = Rate × Time
Total Interest % = 12% × 5 = 60%
Interest earned = 60% of the Principal (₹3200)
Interest = 0.60 × 3200 = 1920
∴ The correct answer is ₹1920.
Alternate Method
Given:
Principal (P) = ₹3200
Rate of Interest (R) = 12% per annum
Time (T) = 5 years
Formula Used:
Simple Interest (SI) = (P × R × T) ÷ 100
Calculations:
⇒ SI = (3200 × 12 × 5) ÷ 100
⇒ SI = 32 × 12 × 5
⇒ SI = 32 × 60
⇒ SI = 1920
∴ The correct answer is ₹1920.
Additional Information
Total Amount in Simple Interest
The total amount (A) payable after the time period is the sum of the Principal and the Simple Interest: A = P + SI.
Compound Interest (CI)
If the interest was compounded annually, the amount would be calculated as A = P(1 + R/100)n, where n is the number of years.
Rate and Time Consistency
Always ensure the Rate (R) and Time (T) are in the same unit (e.g., if R is per annum, T must be in years).