Question

Find Simple Interest and amount on Rs. 15000 at $$5\mathrm{\%}$$ per annum after 2 years.

Answer 1

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 $$S.I.={\displaystyle \frac{P\times n\times r}{100}}$$ 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 $$5\mathrm{\%}$$ per annum after two years.
Now, we will find the simple interest in the principal.
Substituting $$P=15000$$, $$r=5\mathrm{\%}$$ and $$n=2\mathrm{y}\mathrm{e}\mathrm{a}\mathrm{r}\mathrm{s}$$ in the formula $$S.I.={\displaystyle \frac{P\times n\times r}{100}}$$, we get
$$S.I.={\displaystyle \frac{15000\times 2\times 5}{100}}$$
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.