Question

What is 4 years simple interest on \[Rs.1500\] at \[8%pa\] ?

Answer 1

Hint: The simple interest can be calculated by taking the formula which is developed for it. It is given by the equation \[S.I=\dfrac{PTR}{100}\] where the terms \[P\], \[T\], \[R\] and \[S.I\] represent the following
\[S.I\] is the Simple Interest for a given period for the given principal amount
 \[P\] is the Principle amount taken
 \[T\] denotes the time taken to return the amount
 \[R\] denotes the rate for which the interest is taken (rate of interest)

Complete step-by-step solution:
First, we need to denote the given values by the variables given
Given
Principle \[P=Rs.1500\] (taken in rupees)
Time \[T=4years\] (taken in years)
Rate of Interest \[R=8%\] (taken as percentage per year)
Now substitute the following in the formula of Simple Interest given by
$S.I=\dfrac{PTR}{100}$
$ \Rightarrow S.I=\dfrac{PTR}{100} $
$ \Rightarrow S.I.=\dfrac{1500\times 4\times 8}{100} $
Solve the equation obtained above
$ \Rightarrow S.I.=\dfrac{1500\times 32}{100} $
$ \Rightarrow S.I.=\dfrac{15\times 32}{1} $
Finally multiply the numbers \[15\] and \[32\] . the product will be
\[15\times 32=480\]
\[\Rightarrow S.I.=480\]
Hence the Simple Interest for the given time period and rate of interest is \[S.I.=480\]
Additional Information: The Simple Interest is different from compound interest. The rate of interest will remain the same for the entire period if we consider Simple interest. The rate of interest will be compounded for a certain time period in Compound Interest. Generally, the time period in case of simple interest is taken as one year and in case of Compound Interest the time period may be taken for half yearly i.e., six months or for a year i.e., twelve months.

Note: To carry out the calculation for simple interest the values must be considered correctly. The given time period must be in years and the rate of interest is to be taken as percentage per year. The simple Interest calculation does not involve any complex calculations like exponents and so on. It is also different from compound interest.