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A loan of \[Rs.{\text{ }}2500\] was repaid by the person who got the loan by giving \[Rs.{\text{ }}2625\], what is the interest paid?

Answer Verified Verified
Hint: When, the loan was repaid, he had to repay the total amount of principal and the interest. So, we will get the amount of interest by subtracting the amount and the principal.
That is the loan amount is the principal amount and the repaid amount is the total amount, hence by subtracting the principal that is the loan amount from the repaid amount we will get the interest amount paid.

Complete step-by-step answer:
It is given that the principal amount of loan is \[Rs.{\text{ }}2500\] and the person who got the loan repaid by giving \[Rs.{\text{ }}2625\].
We have to find the interest that he paid.
As per the problem the repaid amount is \[Rs.{\text{ }}2625\].
Also we know that the repaid amount is the sum of principal amount and interest.
That is \[{\text{repaid amount = Principal + interest}}\]
By equating the above equation with repaid amount we get,
\[{\text{Principal + interest = Rs}}{\text{. 2625}}\]… (1)
Also we know that principal\[ = Rs.{\text{ }}2500\]… (2)
Now let us substitute the equation (2) in equation (1) we get,
The interest is \[(2625 - 2500) = 125\]
That is the interest paid by the person who got loan is \[Rs.125\]
Hence, the interest that he paid is \[Rs.125\]

Note: Let us consider, the principal be \[P\], the rate of interest is \[R\] and the time is \[T\], then the interest is \[I = \dfrac{{PRT}}{{100}}\]
So, the amount is \[P + \dfrac{{PRT}}{{100}} = P(1 + \dfrac{{RT}}{{100}})\]