Correct Answer - Option 3 : Rs. 320
Given:
A sum of money at simple interest amounts to ₹ 400 in 4 years and ₹ 420 in 5 years.
Formula used:
(i) SI = PRT/100
Where, P = principal
R = rate
T = time
(ii) A = SI + P
Where, A = Amount
SI = simple interest
Calculations:
Interest in 1 year = ₹ 420 - ₹ 400
⇒ ₹ 20
SI = (P × R × T)/100
⇒ 20 = (400 × R × 1)/100
⇒ 20 = 4R
⇒ R = 5%
Interest in 4 years = 20 × 4 = ₹ 80
A = P + SI
⇒ 400 = P + 80
⇒ P = Rs. 320
∴ The sum is ₹ 320.
