Aman invested Rs 25,000 in a fixed deposit with a simple interest rate of 3.75%. How much interest will he earn after 4 years?Options3250395037504150
Question
Aman invested Rs 25,000 in a fixed deposit with a simple interest rate of 3.75%. How much interest will he earn after 4 years?
Options:
- 3250
- 3950
- 3750
- 4150
Solution
To calculate the simple interest, you can use the formula:
Interest = Principal x Rate x Time
where:
- Principal is the initial amount of money that was invested or loaned. In this case, it's Rs 25,000.
- Rate is the annual interest rate. Here, it's 3.75%. But we need to use it as a decimal in our calculations, so we divide it by 100 to get 0.0375.
- Time is the length of time the money is invested or borrowed for, in years. Here, it's 4 years.
So, the interest Aman will earn after 4 years is:
Interest = 25,000 x 0.0375 x 4 = Rs 3,750.
So, the correct option is 3750.
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