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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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