Question

If Rs. 10000 is invested at 5% interest rate p.a. Find the interest at the end of the one year.

Answer 1

Hint: In this problem, we need to find the interest at the end of one year using a simple interest formula.

Complete step-by-step answer:
The formula for simple interest is shown below.
\[{\text{Simple interest = }}\dfrac{{P \cdot r \cdot t}}{{100}}\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,\,......\left( 1 \right) \]
Here, \[P\] is principal, \[r\] is rate of interest and \[t\] is time in years.
Substitute 10000 for \[P\], 5 for \[r\] and 1 for \[t\] in equation (1) to obtain the interest at the end of one year.
\[
  \,\,\,\,\,{\text{Simple interest = }}\dfrac{{\left( {10000} \right) \cdot \left( 5 \right) \cdot \left( 1 \right)}}{{100}} \\
   \Rightarrow {\text{Simple interest = }}\dfrac{{50000}}{{100}} \\
   \Rightarrow {\text{Simple interest = }}500 \\
\]
Thus, the interest at the end of the one year is Rs.500.

Note: When the principal is invested at some interest rate, for some period of time, always use a simple interest formula.