What sum of money (in ₹) will amount to ₹2,400 at 4% per annum simple interest in 5 years?

The correct answer is ₹2,000.

Step-by-Step Explanation:

Let the required principal sum of money be P.

From the given problem, we have the following data:

Amount (A) = ₹2,400

Rate of simple interest (R) = 4% per annum

Time period (T) = 5 years

We know the formula for simple interest (SI) is:

$SI=\frac{P\times R\times T}{100}$

Substituting the values of R and T into the simple interest formula:

$SI=\frac{P\times 4\times 5}{100}=\frac{20P}{100}=\frac{P}{5}$

We also know that the Total Amount (A) is the sum of the Principal (P) and the Simple Interest (SI):

$A=P+SI$

Substitute the values of A and SI into the equation:

$2400=P+\frac{P}{5}$

Simplify the right side of the equation:

$2400=\frac{6P}{5}$

Now, solve for P:

$P=\frac{2400\times 5}{6}$

$P=400\times 5$

$P=2000$

Therefore, the principal sum of money is ₹2,000.