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    Question

    A person borrows money from a lender at a 16% p.a. simple

    interest. If he repaid Rs. 6,960 after 48 months to settle the loan, find the principal amount.
    A Rs.5280 Correct Answer Incorrect Answer
    B Rs.5775 Correct Answer Incorrect Answer
    C Rs.5000 Correct Answer Incorrect Answer
    D Rs.6250 Correct Answer Incorrect Answer

    Solution

    ATQ,

    Let the borrowed amount be Rs ‘x’.

    ATQ;

    (6960 – x) = (x × 16 × 48) ÷ (100 × 12)

    Or, (6960 – x) = (8x/25)

    Or, 6960 = {(8x/25) + x}

    Or, 6960 = (33x/25)

    So, x = 5280

    Therefore, the amount borrowed was Rs. 5,280.

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