A sum of ₹1000 is given at simple interest of 5% for 2 years. What will be the interest?

Appeared in: RML PRE 2025

Explanation

The question requires the calculation of simple interest on a given sum, rate, and time period.
The standard formula for Simple Interest (SI) is: SI = (Principal × Rate × Time) / 100.
The given values are Principal (P) = ₹1000, Rate (R) = 5%, and Time (T) = 2 years.
Substituting these values into the formula gives: SI = (1000 × 5 × 2) / 100.
The calculation simplifies to 10000 / 100, which equals ₹100.

Option B: This is an incorrect calculation. It does not match the result of (1000 × 5 × 2) / 100.
Option C: This is an incorrect calculation.
Option D: This is an incorrect calculation.

Clinical Relevance

Nursing practice connection: This is primarily an exam-oriented knowledge point with limited direct bedside application, so retain Calculation of Simple Interest as background academic context rather than a clinical decision trigger.
This question tests basic numeracy and general aptitude, which is a component of many competitive examinations, including those for nursing positions.
While not a direct clinical skill, financial literacy is an important life skill for personal management. There is no direct nursing practice application for this specific calculation.
What if the question asked for compound interest? The formula would change to A = P(1 + R/100)^T, and the interest would be A - P. For this problem, it would be 1000(1.05)^2 - 1000 = 1102.5 - 1000 = ₹102.5, which is different from simple interest.

How to Approach the Question

First, identify the key components from the question: Principal (P) = ₹1000, Rate of Interest (R) = 5%, and Time (T) = 2 years.
Recall the correct formula for the concept mentioned, which is Simple Interest (SI).
The formula for Simple Interest is SI = (P × R × T) / 100.
Substitute the identified values into the formula: SI = (1000 × 5 × 2) / 100.
Perform the mathematical calculation: SI = 10000 / 100 = 100.
Compare the result (₹100) with the given options and select the matching one.

Concept Tested & Keywords

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Practise the full RML PRE 2025

Attempt every question from this paper in a timed mock, then review the full solution for each one.