Question

 An amount of Rs $3500$ is given at $7% $ p.a. rate of interest. Find the interest which will be received at the end of two years.

Answer 1

Hint: We are given a principal amount and we have to find at a certain rate of interest. When we find the total interest that will be received at the end of two years. For this we will use the formula to find the simple interest   

$SI$ = $\dfrac{{P \times R \times T}}{{100}}$

Here P = amount which is borrowed

R= Rate of interest per annum

T = time(in years) amount of time in which loan is taken 

SI= simple interest taken on amount borrowed

By substituting the values in the formulae we will get the simple interest

Complete step-by-step answer:

Step 1 : We are given a principle of Rs$3500$ and at a rate of interest of $7% $ p.a and time $2$ years

Step2: We will use the formula to find the simple interest

$SI$ = $\dfrac{{P \times R \times T}}{{100}}$

Here P$ = Rs3500$; 

R$ = 7% $p.a and 

T$ = 2$years. 

Substituting the values we get

$\Rightarrow$$SI$$ = \dfrac{{3500 \times 7 \times 2}}{{100}}$

$\Rightarrow$$SI$$ = \dfrac{{49000}}{{100}}$

On solving the expression we get 

$\Rightarrow$$SI$$ = Rs490$

Hence, simple interest received at the end of two years is $Rs490$

Note: This rate is calculated yearly i.e. per annum so we always use the time in years. Sometimes if the time is given in months we convert the months into years as 

1 year = 12 months

By dividing the months by year . In case of days we will divide them by as

1 year = 365 days