Mr. Ali borrows RS. 500 from bank for a period of 4 years. If interest rate is 11% per anum, what would be the amount of interest he has to pay back in addition to the principal amount?

Mr. Ali borrows RS. 500 from bank for a period of 4 years. If interest rate is 11% per anum, what would be the amount of interest he has to pay back in addition to the principal amount?

Explanation

To calculate the interest, you can use the formula:

Interest = Principal × Rate × Time

In this case:

Principal (P) = Rs. 500

Rate (R) = 11% per annum = 0.11

Time (T) = 4 years

Interest = 500 × 0.11 × 4 = Rs. 220

So, Mr. Ali has to pay back the principal amount of Rs. 500 plus the interest of Rs. 220, making a total of Rs. 720.

The correct answer is: Rs. 220