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, assuming standard simple interest calculations?

Introduction / Context:
This question is an elementary example of simple interest where the principal, rate, and time are given and we must find the total amount to be repaid. It checks whether the learner can correctly compute the interest and then add it to the original principal to find the sum owed after a fixed period. Such problems mimic small personal loans and short term borrowings.

Given Data / Assumptions:
- Principal borrowed P = Rs 500. - Annual simple interest rate R = 5 percent per annum. - Time period T = 4 years. - Interest is computed using the simple interest formula. - Required quantity is the total amount A = principal + interest.

Concept / Approach:
Simple interest is calculated using SI = (P * R * T) / 100. Once SI is known, the total amount to be repaid is A = P + SI. There is no compounding in simple interest, so the interest each year is constant and directly proportional to time. The key steps are to compute SI correctly and not to confuse interest alone with the total amount.

Step-by-Step Solution:
Step 1: Identify P = Rs 500, R = 5 percent, T = 4 years. Step 2: Use SI = (P * R * T) / 100. Step 3: Substitute the values: SI = (500 * 5 * 4) / 100. Step 4: Compute 500 * 5 = 2,500. Step 5: Multiply 2,500 * 4 = 10,000. Step 6: Divide by 100: SI = 10,000 / 100 = Rs 100. Step 7: Compute total amount A = P + SI = 500 + 100. Step 8: A = Rs 600. Step 9: So Deksha must repay Rs 600 to clear the debt after 4 years.

Verification / Alternative check:
As a quick check, we can calculate the interest per year. For one year, interest is (500 * 5 * 1) / 100 = Rs 25. Over 4 years, total interest is 25 * 4 = Rs 100, which agrees with the detailed calculation. Adding back the principal of Rs 500 gives a total of Rs 600, confirming the answer.

Why Other Options Are Wrong:
Rs 150 represents only part of the interest or a miscalculated interest amount and does not include the principal. Rs 650 would require interest of Rs 150, which does not match 5 percent of 500 over 4 years. Rs 100 is only the interest, not the total repayment amount. Only Rs 600 equals principal plus correctly calculated interest.

Common Pitfalls:
A frequent mistake is to choose the interest amount instead of the total repayment. Another error is to forget to divide by 100 in the simple interest formula when applying the percentage rate. Keeping the two steps separate, first finding SI and then adding it to the principal, helps avoid confusion.

Final Answer:
The total amount Deksha must pay back after 4 years is Rs 600.