Discussion
Mr. Prem Malhotra borrowed a sum of ₹ 48,000 from his friend on 31st December 2019 for one year at simple interest at 8% per annum. However, Mr. Prem returned the money on 1 July 2020. How much amount he had to return to his friend ?
Answer: A
He had to return ₹ 49,920.
He borrowed on 31 December 2019 and repaid on 1 July 2020, which is half of the year (2020 being a leap year, 183 of 366 days). Simple interest for half a year at 8% is:
\[ 48000 \times 0.08 \times \tfrac{1}{2} = 1920 \]
The amount returned is \(48000 + 1920 = 49920\). The full year's interest of 3840 would give 51,840, which is not an option, and the other figures correspond to different periods.
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