A sum, when invested at 10% simple interest per annum, amounts to ₹4080 after 2years. What is the simple interest (in ₹) on the same sum at the same rate of interest in 1 year?

Given:

Rate of interest (R) = 10% per annum

Time for 2 years (T) = 2 years

Amount after 2 years (A) = ₹4080

Formula Used:

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

Simple Interest (SI) = (P × R × T) / 100

Calculation:

⇒ A = P + SI

⇒ ₹4080 = P + (P × 10 × 2) / 100

⇒ ₹4080 = P + (20P / 100)

⇒ ₹4080 = P (1 + 20 / 100)

⇒ ₹4080 = P × (120 / 100)

⇒ P = ₹4080 × (100 / 120)

⇒ P = ₹3400

Simple interest for 1 year = (P × R × T) / 100

⇒ SI = (₹3400 × 10 × 1) / 100

⇒ SI = ₹340

The simple interest for 1 year is ₹340.