What is the simple interest on Rupees 1500 at the rate of 5% per annum for 3 years?

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Answer

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Hint:
Here, we will substitute the given values in the formula of simple interest to find the required interest. Then we will add the principal to the obtained simple interest to find the required amount. Simple interest is defined as the interest calculated for the principal at a rate for a period of time.

Formula Used:
We will use the following formulas:
1) Simple Interest is given by the formula \[S.I. = \dfrac{{P \times n \times r}}{{100}}\] where \[S.I\] is the Simple Interest, \[P\] is the principal, \[r\] is the rate of Interest and \[n\] is the number of years.
2) The total amount is given by \[A = P + S.I.\] where \[A\] is the amount, \[P\] is the principal, \[S.I\] is the Simple Interest.

Complete Step by Step Solution:
We are given a principal of Rs. 15000 at \[5\% \] per annum after two years.
Now, we will find the simple interest in the principal.
Substituting \[P = 15000\], \[r = 5\% \] and \[n = 2{\rm{years}}\] in the formula \[S.I. = \dfrac{{P \times n \times r}}{{100}}\], we get
\[S.I. = \dfrac{{15000 \times 2 \times 5}}{{100}}\]
Dividing the terms by 100, we get
\[ \Rightarrow S.I. = 150 \times 2 \times 5\]
By multiplying the terms, we get
\[ \Rightarrow S.I. = 1500\]
Thus, the simple interest for the principal is Rs. 1500.
Now, we will find the amount after 2 years
Substituting \[S.I. = 1500\] and \[P = 15000\] in the formula \[A = P + S.I.\] we get
\[A = 15000 + 1500\]
Adding the terms, we get
\[ \Rightarrow A = 16500\]

Therefore, the simple interest on Rs.15000 at 5% per annum for two years is Rs 1500 and the amount after 2 years is Rs. 16500.

Note:
Simple interest is used in banking and financing sector and is generally used for the payment of loan or EMI. We should not get confused between simple interest and compound interest. The main difference between simple interest and compound interest is that simple interest is based only on the principal amount whereas compound interest is based on the principal amount and also the interest compounded for a period.

How to calculate simple interest?

Principal: The money which we deposit in or the lower from the bank or the money learned called the principal.

Rate of interest: The interest paid on $ 100 for one year is called the rate per cent per year or rate per cent per annum.

Time: The period of time for which the money is lent or invested.

Interest: Additional money paid by the borrowed to the lender for using the money is called interest.

Simple Interest: If the interest is calculated uniformly on the original principal throughout the lone period, it is called simple interest.

Amount: The total money paid back to the lender is called the amount.

Calculate Simple Interest

Formula to calculate Simple Interest?

If P denotes the principal ($), R denotes the rate (percentage p.a.) and T denotes time (years), then:-

S.I = (P × R × T)/100

R = (S.I × 100)/(P × T)

P = (S.I × 100)/(R × T)

T = (S.I × 100)/(P × R)

If the denotes the amount, then A = P + S.I

Note:

● When we calculated the time period between two dates, we do not could the day on which money is deposited but we count the day on which money is retuned.

● Time is always taken according to the per cent rat.

● For converting time in days into years, divide th number of days by 365 (for ordering or lap year.)

● For converting time in month into years, divide th number of month by 12 (for ordering or lap year.)

Examples to find or calculate simple interest when principal, rate and time are known

Calculate Simple Interest

Find the simple interest on:

(a) $ 900 for 3 years 4 months at 5% per annum. Find the amount also.

Solution:

P = $ 900,

R = 5% p.a.

T = 3 years 4 months = 40/12 years = 10/3 years

Therefore, S.I = (P × R × T)/100 = (900 × 5 × 10)/(100 × 3) = $ 150

Amount = P + S.I = $ 900 + $ 150 = $ 1050

(b) $ 1000 for 6 months at 4% per annum. Find the amount also.

Solution:

P = $ 1000,

R = 4% p.a.

T = 6 months = 6/12 years

S.I = (P × R × T)/100 = (1000 × 4 × 1)/(100 × 2) = $ 20

Therefore, A = P + I = $( 1000 + 20) = $ 1020

(c) $ 5000 for 146 days at 15¹/₂% per annum.

Solution:

P = $ 5000, R = 151/2% p.a. T = 146 days

S.I = ( 5000 × 31 × 146)/(100 × 2 × 365)

= $ 10 × 31 = $ 310

(d) $ 1200 from 9ᵗʰ April to 21ˢᵗ June at 10% per annum.

Solution:

P = $ 1200, R = 10% p.a. T = 9th April to 21st June

= 73 days [April = 21, May = 31, Jun = 21, 73 days]

= 73/365 years

S.I = (1200 × 10 × 73)/(100 × 365) = $ 24

Examples to find or calculate Time when Principal, S.I and Rate are known

Calculate Simple Interest

1. In how much time dose $ 500 invested at the rate of 8% p.a. simple interest amounts to $ 580.

Solution:

Here P = $ 500, R = 8% p.a A = $ 580

Therefore S.I = A - P = $ (580 - 500) = $ 80

Therefore T = (100 × S.I)/(P × R) = (100 × 80)/(500 × 3) = 2 years

2. In how many years will a sum of $ 400 yield an interest of $ 132 at 11% per annum?

Solution:

P = $ 400, R = 11% S.I = $ 132

T = (100 × S.I)/(P × R) = (132 × 100)/(400 × 11) = 3 years

Calculate Simple Interest

3. In how many years will a sum double itself at 8 % per annum?

Solution:

Let Principal = P, then, Amount = 2P

So , S.I. = A - P = 2P – P = P

T = (100 × S.I)/(P × R) = ( 100 × P)/(P × 8) = 25/2 = 121/2 years

Calculate Simple Interest

4. In how many years will simple interest on certain sum of money at 6 1/4% Per annum be 5/8 of itself?

Solution:

Let P = $ x, then S.I = $ 5/8 x

Rate = 6 1/4% = 25/4 %

Therefore T = ( 100 × S.I)/(P × R) = ( 100 × 5/8)/(x × 25/4) x = ( 100 × 5 × x × 4)/(x × 8 × 25)

Examples to find or calculate Rate per cent when Principal, S.I. and Time are known

1. Find at what rate of interest per annum will $ 600 amount to $ 708 in 3 years.

Solution:

P= $ 600 , A = $ 708 Time = 3 years

Therefore S.I. = $ 708 - $ 600 = $ Rs. 108

Now, R = ( 100 × S.I)/(P × R) = (100 × 108)/(600 × 3) = 6% p.a.

Calculate Simple Interest

2. Simple interest on a certain sum is 36/25 of the sum. Find the Rate per cent and time if they are both numerically equal.

Solution:

Let the Principal be $ X Then S.I. = 36/25 x

R = ? T = ?

Let Rate = R % per annum, then Time = R years.

So S.I. = (P × R × T)/100 → 36/25 x = (x × R × T)/100

--- ( 36 × 10 × x)/(25 × x) = R2

----- R2 = 36 × 4 ----- R = √(36 × 4) = 6 × 2

Therefore Rate = 12 % p.a. and T = 12 years

Calculate Simple Interest

3. At what rate per cent per annum will $ 6000 produce $ 300 as S.I. in 1 years?

Solution:

P= $ 600, T = 1 year S.I. = $ 300

Therefore R = ( S.I × 100)/(P × R) = ( 300 × 100)/(6000 × 1) = 5% p.a

4. At what rate per cent per annum will a sum triple itself in 12 years ?

Solution:

Let the sum be $ P, then Amount = $ 3P

S.I. = $ 3P – P = $ 2P, Time = 12 years

Now, R =( S.I × 100)/(P × R) = (100 × 2P)/(P × 12) = 50/3 = 16.6 %

Examples to find or calculate Principal when Rate, Time and S.I. are known

Calculate Simple Interest

1. What sum will yield $ 144 as S.I. in 21/2 years at 16% per annum?

Solution:

Let P = $ x, S.I. = $ 144

Time = 21/2 years or 5/2 years, Rate = 16%

So, P = ( 100 × S.I)/(P × R) = ( 100 × 144)/(16 × 5/2) = ( 100 × 144 × 2)/(16 × 5) = $ 360

2. A some amount to $ 2040 in 21/2 years at , P = ?

Solution:

Let the principal = $ x

S.I. = $ (x × 11 × 5/2 × 1/100) = $ 11x/40

Amount = P + S.I. = x/1 + 11x/40 = (40x × 11x)/40 = 51x/40

But 51x/40 = 2040

51x = 2040 × 40 ---- x = (2040 × 40)/51 = $ 1600

Calculate Simple Interest

3. A certain sum amounts to $ 6500in 2 years and to $ 8750 in 5 years at S.I. Find the sum and rate per cent per annum.

Solution:

S.I. for 3 years = Amount after 5 years – Amount after 2 years

= $ 8750 – $ 6500 = 2250
S.I. for 1 years = Rs. 2250/3 = $ 750

Therefore S.I. for 2 years = $ 500× 2 = $ 1500

So, sum = Amount after 2 years – S.I.for 2 years

= $ 6500- 1500 = $ 5000

Now, P = Rs.5000, S.I. = $ 1500, Time = 3 years

R = ( 100 × S.I)/(P × T) = (100 × 1500)/(5000 × 2) = 15%

Therefore The sum is $ 5000 and the rate of interest is 15%

4. Divide $ 6500 in to two parts , such that if one part is lent out at 9% per annum and other at 10% per annum, the total yearly income is $ 605

Solution:

Let the first part be $ x. Second part = $ (6500 - x )

Now S.I. on $ X at 9% per annum for 1 year = $ (x × 9 × 1)/100 = 9x/100

S.I. on $ (6500 – x ) at 10% per annum

1 year = $ ((6500-x) × 10 × 1)/100 = $ ((6500 - x))/10

Total S.I = $ (9x/100+ (6500 - x)/10) = ((9x + 6500 - 10x)/100)

= $ ( 65000 - x)/100

But given that total S.I.= $ 605

So, (6500 - x)/100 =605 -----65000 - x = 60500

----- 65000 – 60500 = x ---- x = $ 4500

Now, second part = 6500 – x = 6500 – 4500 = $ 2000

Hence, first part = $ 2000 and second part = $ 4500

5. When the rate of interest in a bank is increased from 9% to 10% per annum; A person deposits $ 500 more into his account. If the annual interest now Received by him is $ 150more then before, find his original deposit.

Solution:

Let the original deposits be $ x

Then, S.I. on $ x for 1 year at (10 - 9 )% = 1% per annum + S.I. on $ 500

For I year at 10% per annum = $ 15

----- ( x × 1 × 1)/100 + ( 500 × 10 × 1)/100 = 150

----- x/(100 ) + 50 = 150 ---- x/(100 ) + 150 – 50 ----- x/(100 ) + 100

----- x = 100 × 100 = $ 10,000

Therefore, the original deposit is $ 10,000.

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