Deksha borrows Rs 500 at 5% simple interest per annum. What total amount, in rupees, will she have to pay back in order to clear her debt after 4 years?

Introduction / Context:
This is a straightforward simple interest problem where you must compute both the interest and the final amount to be repaid. Such questions appear frequently in exam papers to check whether candidates can correctly apply the simple interest formula and then add the interest to the principal.

Given Data / Assumptions:

• Principal, P = Rs 500.
• Rate of simple interest, R = 5% per annum.
• Time period, T = 4 years.
• Simple interest is calculated on the original principal only.

Concept / Approach:
The simple interest formula is:
SI = (P * R * T) / 100Once the simple interest is found, the total amount to be repaid is calculated as:
Amount, A = P + SIThis method is standard in simple interest related loan repayment questions.

Step-by-Step Solution:
Step 1: Substitute the values into the simple interest formula.SI = (500 * 5 * 4) / 100Step 2: Multiply the numerator.500 * 5 * 4 = 10,000Step 3: Divide by 100.SI = 10,000 / 100 = Rs 100Step 4: Compute the total amount to be repaid.A = P + SI = 500 + 100 = Rs 600

Verification / Alternative check:
The rate is 5% per annum on Rs 500, so annual interest is (500 * 5) / 100 = Rs 25. Over 4 years, interest should therefore be 25 * 4 = Rs 100. Adding this to the principal gives 500 + 100 = 600. This quick mental check confirms that the detailed calculation is correct.

Why Other Options Are Wrong:

• Rs 150 is the interest portion only if one mistakenly multiplies incorrectly or confuses the values; it is not the total repayable amount.
• Rs 650 assumes a larger interest than correct and does not match the 5% rate for 4 years.
• Rs 100 represents only the interest and not the full amount to be repaid.

Common Pitfalls:
A typical error is to forget to add the principal to the interest and to mark only the interest as the final amount. Another mistake is miscalculating the numerator in the simple interest formula or failing to divide by 100 properly. Keeping track of units, writing each step clearly, and doing a quick mental verification based on yearly interest help in avoiding such mistakes.

Final Answer:
To clear her debt after 4 years, Deksha must repay a total of Rs 600.