Question

Find the amount to be paid at the end of three year. If \[{\text{principle = Rs.}}{\text{7500}}\] at \[{\text{5 % p}}{\text{.a.}}\]

Answer 1

Hint: Firstly among the data given in the question it is cleared that the principle amount and time period are of \[{\text{Rs.}}{\text{7500}}\] for three year and rate of interest is 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. We can firstly calculate the interest amount and then we can switch to the total amount by adding the principle amount into the obtained interest amount.

Complete step by step solution: Given the principle amount and time period are of \[{\text{Rs}}{\text{.7500}}\] for three year and rate of interest is of \[{\text{5 % }}\].
As, we know that the total amount of interest can be easily calculated by \[{\text{A = P(1 + }}\dfrac{{{\text{RT}}}}{{{\text{100}}}}{\text{)}}\]
Simply it’s the addition of base amount to the interest amount
Where,
P = principle amount,
R=rate of interest
N= time period
Substituting all the values,
\[ \Rightarrow {\text{A = 7500}}\left( {{\text{1 + }}\dfrac{{{\text{5} \times 3}}}{{{\text{100}}}}} \right)\]
On simplification we get,
\[ \Rightarrow {\text{A = 7500}}\left( {{\text{1 + }}\dfrac{{\text{3}}}{{{\text{20}}}}} \right)\]
On taking LCM and simplifying we get,
\[ \Rightarrow {\text{A = 7500}}\left( {\dfrac{{{\text{23}}}}{{{\text{20}}}}} \right)\]
On cancelling common factors we get,
\[ \Rightarrow {\text{A = 375(23)}}\]
\[ \Rightarrow {\text{A = Rs}}{\text{.8625}}\]

Therefore , amount at the end of two year will be \[{\text{Rs.}}{\text{8625}}\].

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.