QUESTION

# Find the amount to be paid at the end of 3 years when at 12% per annum?

Hint: Use a simple interest formula to determine the amount to be paid at the end of 3 years. Use the formula, $S.I=\dfrac{P\times R\times T}{100}$ to determine the interest. Add the obtained interest to the principal amount to determine the total amount to be paid.
We use simple interest to calculate the interest over a certain period of time that is to be repaid to the money lender along with the principal amount. Mathematically,$A=P+S.I$, where A is the total amount, P is the principal amount and S.I is the simple interest.
Let us denote the rate with ‘R’ and time with ‘T’. We have been given, $P=Rs.\text{ }1200,\text{ }R=12%\text{ and }T=3\text{ }years$.
Using the formula, $S.I=\dfrac{P\times R\times T}{100}$ and substituting the value of $P,R\text{ and }T$, we get,
\begin{align} & S.I=\dfrac{1200\times 12\times 3}{100} \\ & \text{ }=12\times 12\times 3 \\ & \text{ }=432 \\ \end{align}
Hence, the total amount to be paid after 3 years $=Rs.\text{ }(1200+432)=Rs.\text{ }1632$.