An amount invested at simple interest gives Rs 720 interest at 12% per annum in 3years. What is the principal (in Rs)?

Options

A. 2400
B. 1500
C. 3000
D. 2000

Answer

To find the principal amount (P) that was invested to earn Rs 720 in interest at a rate of 12% per annum over 3 years using simple interest, we can use the formula for simple interest:

\[ \text{Simple Interest (SI)} = \frac{P \times R \times T}{100} \]

Where:
- SI = Simple Interest (Rs 720)
- P = Principal amount (unknown)
- R = Rate of interest (12%)
- T = Time (3 years)

### Step 1: Write down the formula for Simple Interest
We start with the formula:
\[ SI = \frac{P \times R \times T}{100} \]

### Step 2: Substitute the known values into the formula
Substituting the known values into the formula:
\[ 720 = \frac{P \times 12 \times 3}{100} \]

### Step 3: Simplify the equation
Now we simplify the equation:
\[ 720 = \frac{P \times 36}{100} \]

### Step 4: Multiply both sides by 100 to eliminate the fraction
To eliminate the fraction, multiply both sides by 100:
\[ 720 \times 100 = P \times 36 \]
\[ 72000 = P \times 36 \]

### Step 5: Solve for P
Now, divide both sides by 36 to solve for P:
\[ P = \frac{72000}{36} \]

### Step 6: Calculate the value of P
Now we perform the division:
\[ P = 2000 \]

### Conclusion
The principal amount (P) is Rs 2000.