A sum of money lent out at simple interest amounts to tk. 720 after 2 years and to tk. 1020 after further period of 5 years. The sum is:

A Tk. 500

B tk. 600

C tk. 700

D tk. 710

Correct Answer: Option B

Principal + SI for 2 years = 720 tk. ……(I)

Principal + SI for 7 years = 1020 tk. ……(II)

Subtracting equation (I) from (II),

S.I. for 5 years = (1020 – 720) = 300 tk.

∴ S.I. for 2 years =120 tk.

∴ Principal = (720 – 120) = 600 tk.