An amount invested at simple interest gives Rs 800 interest at `16%` in 2 years. What is the principal (in Rs)?

Options

A. 4000
B. 3500
C. 5000
D. 2500

Answer

To find the principal amount invested at simple interest, we can use the formula for simple interest:

\[ \text{SI} = \frac{\text{P} \times \text{R} \times \text{T}}{100} \]

Where:
- SI = Simple Interest
- P = Principal amount
- R = Rate of interest per annum
- T = Time in years

Given:
- SI = Rs 800
- R = 16%
- T = 2 years

Now, we can substitute the given values into the formula to find the principal (P).

### Step 1: Substitute the values into the formula
\[ 800 = \frac{P \times 16 \times 2}{100} \]

### Step 2: Simplify the equation
Multiply both sides by 100 to eliminate the fraction:
\[ 800 \times 100 = P \times 16 \times 2 \]
\[ 80000 = P \times 32 \]

### Step 3: Solve for P
Now, divide both sides by 32 to isolate P:
\[ P = \frac{80000}{32} \]

### Step 4: Calculate the value of P
Now, perform the division:
\[ P = 2500 \]

Thus, the principal amount is Rs 2500.

### Final Answer:
The principal amount is Rs 2500.

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