What principal is required to earn a monthly interest of Rs 400 at 10% per annum (simple interest)?

Introduction / Context:Simple interest (SI) per period equals Principal * Rate per period. Convert annual rate to a monthly rate to find the principal that yields a target monthly interest.

Given Data / Assumptions:

• Monthly interest desired = Rs 400.
• Annual rate = 10% → monthly rate = 10% / 12 = 0.10/12.

Concept / Approach:SI_month = P * r_month → P = SI_month / r_month.

Step-by-Step Solution:P = 400 / (0.10/12) = 400 * 12 / 0.10 = 48,000.

Verification / Alternative check:Monthly SI on 48,000 at 10% p.a. = 48,000 * 0.10 / 12 = 400.

Why Other Options Are Wrong:2,000/12,000/24,000 produce insufficient monthly interest at the given rate.

Common Pitfalls:Using 10% as monthly instead of annual; forgetting to divide by 12.

Final Answer:Rs 48,000