What sum (in ₹) will earn a simple interest of ₹480 in 3 years at 16% per year rate of interest?

Appeared in: DSSSB 6 September 2024

Explanation

The question asks for the principal amount given the simple interest, rate, and time.
The formula for Simple Interest (SI) is SI = (P × R × T) / 100.
To find the Principal (P), the formula is rearranged to P = (SI × 100) / (R × T).
Substituting the given values: P = (480 × 100) / (16 × 3).
Calculation: P = 48000 / 48, which equals 1000.
Therefore, the principal sum is ₹1000.

Option B: If the principal were ₹2000, the simple interest earned would be (2000 × 16 × 3) / 100 = ₹960, which is not the ₹480 given in the problem.
Option C: If the principal were ₹1500, the simple interest earned would be (1500 × 16 × 3) / 100 = ₹720, which is incorrect.
Option D: If the principal were ₹500, the simple interest earned would be (500 × 16 × 3) / 100 = ₹240, which is not the specified amount.

Clinical Relevance

Nursing practice connection: This is primarily an exam-oriented knowledge point with limited direct bedside application, so retain Calculating the Principal amount in a Simple Interest problem as background academic context rather than a clinical decision trigger.
This question tests basic mathematical and analytical skills, which are fundamental for nurses.
Nurses use similar calculations for tasks like medication dosage calculations, IV drip rate adjustments, and interpreting patient data charts.
What if the interest was compounded annually? The calculation would be more complex (A = P(1 + R/100)^T), and the principal required would be different, demonstrating the importance of identifying the correct calculation method (simple vs. compound interest).

How to Approach the Question

First, identify what the question is asking for. Here, it's the 'sum' or principal amount.
Next, list all the known values provided in the question: Simple Interest (SI) = ₹480, Rate (R) = 16%, and Time (T) = 3 years.
Recall the standard formula for Simple Interest: SI = (P × R × T) / 100.
Rearrange this formula to solve for the unknown variable, which is Principal (P). The rearranged formula is P = (SI × 100) / (R × T).
Substitute the known values into the rearranged formula and perform the calculation.
Compare your calculated result with the given options to find the correct answer.

Concept Tested & Keywords

QPoQJDFikpiwXU55b-2J6N

Practise the full DSSSB 6 September 2024

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