Question

Harish borrows 2,500 at 3% per annum for 1st year and 21,000 at 5% per annum interest for 2nd year. What interest will Harish have to pay after two years.

Answer 1

Hint: We are asked to find the interest at the end of two years with two different sums. So we’ll find the interest for these two years individually and then adding these two will give us the final interest which is to be paid by Harish for two years.

Complete step-by-step answer:

Given that principal \[{P_1}\]=2500 and rate \[{R_1}\]=3
principal\[{P_2}\]=21000 and rate \[{R_2}\]=5
We are asked to find interest after 2 years
Taking time \[T\]=1 for first year, using principle and rate for first year we get
 Interest after first year \[{I_1} = \dfrac{{{P_1} \times {R_1} \times T}}{{100}} = \dfrac{{2500 \times 3}}{{100}} = 75\]
Interest after second year using principal and rate for second year \[{I_2} = \dfrac{{{P_2} \times {R_2} \times T}}{{100}} = \dfrac{{21000 \times 5}}{{100}} = 1050\]
∴ Total sum to be paid at the end of the two years is \[I = {I_1} + {I_2}\]
\[\begin{gathered}
   = 75 + 1050 \\
   = 1125 \\
\end{gathered} \]

Interest will Harish have to pay after two years is Rs. 1125.

Note: When money is borrowed, interest is charged for the use of that money for a certain period of time. When the money is paid back, the principle and the interest is paid back. This is the interest that Harish had to pay for 2 years.