Simple Interest — Ajay borrows at 5% p.a. simple interest and repays ₹ 8,800 after 2 years, clearing the loan. Find the interest paid by Ajay.

Introduction / Context:
For simple interest, the amount after t years is A = P * (1 + r * t). Given the amount and rate-time product, the principal and interest are straightforward to compute.

Given Data / Assumptions:

• A = ₹ 8,800 after 2 years.
• r = 5% p.a. (0.05), simple interest.

Concept / Approach:
A = P * (1 + 0.05 * 2) = 1.10 P ⇒ P = A / 1.10. Interest paid = A − P.

Step-by-Step Solution:
P = 8,800 / 1.10 = ₹ 8,000.Interest = 8,800 − 8,000 = ₹ 800.

Verification / Alternative check:
Direct SI: 8,000 * 0.05 * 2 = 800; A = 8,800.

Why Other Options Are Wrong:
₹ 825, ₹ 850, ₹ 975, ₹ 880 do not match 10% of principal over 2 years.

Common Pitfalls:
Misapplying compounding or forgetting that SI over 2 years at 5% totals 10% of principal.

Final Answer:
₹ 800