Question

Find the amount from the investment of \[{\text{Rs}}{\text{.4500}}\] for two year at \[{\text{5}}\] paisa per rupee interest.

Answer 1

Hint: Firstly among the data given in the question it is cleared that the principle amount and time period are of \[{\text{Rs}}{\text{.4500}}\] for two year which are at the rate of interest of \[{\text{5 % }}\]. Now using the simple interest formula \[{\text{A = P(1 + }}\dfrac{{{\text{RT}}}}{{{\text{100}}}}{\text{)}}\]. Putting the values in this formula our answer will be obtained.

Complete step by step solution: Given, principle of \[{\text{Rs}}{\text{.4500}}\], Time as 2 years and Rate as \[{\text{5 % }}\] p.a.
As, we know that the amount of interest can be calculated by formula as per mentioned in the hint\[{\text{A = P(1 + }}\dfrac{{{\text{RT}}}}{{{\text{100}}}}{\text{)}}\]
Where,
P = principle amount,
R=rate of interest
N= time period
On Substituting all the values, we get,
\[ \Rightarrow A = 4500\left( {1 + \dfrac{{5 \times 2}}{{100}}} \right)\]
On further simplification we get,
\[ \Rightarrow A = 4500\left( {1 + \dfrac{1}{{10}}} \right)\]
On taking LCM and solving we get,
\[ \Rightarrow A = 4500\left( {\dfrac{{11}}{{10}}} \right)\]
On cancelling common factors we get,
\[ \Rightarrow A = 450(11)\]
\[ \Rightarrow A = Rs.4950\]

Therefore, the amount at the end of two years will be \[Rs.4950\].

Note: Simple interest is calculated on the principal, or original, amount of a loan. Compound interest is calculated on the principal amount and also on the accumulated interest of previous periods, and can thus be regarded as "interest on interest."
Simple interest is calculated by multiplying the daily interest rate by the principal, by the number of days that elapse between payments.