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Answer: (C) 3,000
Explanation
The Simple Interest (SI) formula is SI = (P × R × T)/(100), where P is the principal sum, R is the rate of interest per annum, and T is the time period in years. Substituting the given values SI = 480, R = 8, and T = 2 into the formula yields:
480 = (P × 8 × 2)/(100)
480 = (16P)/(100)
48000 = 16P
P = ⁴⁸⁰⁰⁰⁄₁₆ = 3000
Alternatively, the effective interest rate for 2 years at 8% per annum is 8 × 2 = 16%. Since 16% of the sum equals 480, the 100% principal sum is ⁴⁸⁰⁄₁₆ × 100 = 3000.