Gopal has borrowed an amount of ₹420000 from a bank to start a business. How much simple interest (in ₹) will he pay at a rate of 5% per annum after 4 years?

The correct option is 84000.

To find the simple interest that Gopal will pay, we can use the standard simple interest formula:

$\text{Simple Interest (SI)}=\frac{P\times R\times T}{100}$

Where the variables represent the following parameters:
• $P$ is the Principal amount borrowed = ₹420000
• $R$ is the rate of interest per annum = 5%
• $T$ is the time duration = 4 years

Substituting these values into our formula:

$\text{SI}=\frac{420000\times 5\times 4}{100}$

To simplify the calculation, we divide 420000 by 100, which reduces the equation to:

$\text{SI}=4200\times 5\times 4$

First, calculate the product of the rate and the time:

$5\times 4=20$

Now, multiply the remaining terms to find the final simple interest amount:

$\text{SI}=4200\times 20$

$\text{SI}=84000$

Thus, Gopal will pay a simple interest of ₹84000 after 4 years.