A sum of money, invested for 8 years on 5% per annum simple interest, amounted to 175 on maturity. ‘What was the sum invested?

Correct option is B

Given:

Time (T) = 8 years

Rate (R) = 5% per annum

Amount (A) = ₹175

Formula Used:

Simple Interest (SI) = $$\frac{(P × R × T) }{ 100}$$​​

Amount (A) = Principal (P) + Simple Interest (SI)

Solution:

Let the principal (sum invested) be P.

​$$A = P + \frac{P \times R \times T}{100} \\\ \\=> 175 = P + \frac{P \times 5 \times 8}{100} \\\ \\=> 175 = P + \frac{40P}{100} \\\ \\=> 175 = P \times \left(1 + \frac{40}{100} \right) = P \times \frac{140}{100}\\\ \\=> P = \frac{175 \times 100}{140} \\\ \\=> P = 125$$​​