Understanding Simple Interest Calculation

This question asks us to calculate the simple interest earned on a loan. We are given the principal amount, the time period, and the annual interest rate.

Simple Interest Formula

The formula used to calculate simple interest is:

$ \text{Simple Interest (SI)} = \frac{P \times T \times R}{100} $

Where:

• P is the Principal amount (the initial sum of money borrowed or invested)
• T is the Time period (in years) for which the money is borrowed or invested
• R is the Rate of interest (per annum)

Applying the Formula to the Problem

Let's identify the values given in the question:

• Principal amount (P) = ₹400
• Time period (T) = 5.5 years
• Rate of interest (R) = 4% per annum

Now, we substitute these values into the simple interest formula:

$ \text{SI} = \frac{400 \times 5.5 \times 4}{100} $

Step-by-Step Calculation

1. Multiply the principal amount by the time period:

   $ 400 \times 5.5 $

   To make multiplication easier, we can think of 5.5 as 5 + 0.5:

   $ 400 \times (5 + 0.5) = (400 \times 5) + (400 \times 0.5) = 2000 + 200 = 2200 $

2. Now, multiply the result by the rate of interest:

   $ 2200 \times 4 = 8800 $

3. Finally, divide the result by 100 to get the simple interest:

   $ \text{SI} = \frac{8800}{100} $

   $ \text{SI} = 88 $

So, the simple interest is ₹88.

Final Answer Verification

The calculated simple interest is ₹88, which matches one of the options provided.