Find the principal — monthly simple interest rate: What principal will amount to ₹ 3400 in 3 years at a simple interest rate of 1% per month (i.e., 12% per annum)?

Introduction / Context:Monthly simple interest rates must be scaled by the number of months. Here the monthly rate is 1%, so the 3-year period contains 36 months, producing a 36% total simple interest on the principal.

Given Data / Assumptions:

• Amount A = ₹ 3400
• Time = 3 years = 36 months
• Monthly SI rate = 1% → total SI over 36 months = 36% of principal

Concept / Approach:Amount under SI with monthly rate: A = P * (1 + 0.01 * 36) = P * 1.36. Solve for P = A / 1.36.

Step-by-Step Solution:A = P * 1.36P = 3400 / 1.36 = ₹ 2500

Verification / Alternative check:Check interest: 36% of ₹ 2500 = ₹ 900. Amount = 2500 + 900 = ₹ 3400 (matches).

Why Other Options Are Wrong:₹ 2400, ₹ 1800, ₹ 1600, and ₹ 2600 do not produce an amount of ₹ 3400 under 36% total SI.

Common Pitfalls:Using 12% for 3 years (36%) is correct here because the rate is given per month at 1%. Confusing monthly with annual can cause errors.

Final Answer:₹ 2500