Question

Rekha obtained a loan of $3000$from a cooperative bank for $2$years at the rate of $7\% $per annum. Find the simple interest she has to pay to the bank after $2$years.

Answer 1

Hint: Here, to solve the problem, simple interest is equal to the product of principle, time taken, rate of interest per annum and $\dfrac{1}{{100}}$. Total amount paid is equal to the sum of principle and simple interest.

Complete Step-by-step Solution
Given that the principle is ${\rm{Rs}}{\rm{.}}\;3000$.
Given that the time is $2{\rm{ years}}$.
The rate of interest$\left( R \right)$is $7\% $ per annum.

Let us take simple interest as $I$.
Simple interest is described as one of the easy methods for calculating the interest amount on a loan.
The general formula for simple interest is,
$I = \dfrac{{PTR}}{{100}}$
Where $P$is the principle and $T$is the time taken and $R$ is the rate of interest per annum.
Substitute the values in the above relation of simple interest.
$\begin{array}{c}
 = \dfrac{{\left( {3000} \right) \times \left( 2 \right) \times 7}}{{100}}\\
 = {\rm{Rs}}{\rm{. }}420
\end{array}$
Thus, the simple interest will be equal to ${\rm{Rs }}420$.
The amount should be paid after $2{\rm{ years}}$to bank$\left( A \right)$is,
$A = P + I$
Substitute the values in the above relation for the amount to be paid to the bank after 2 years.
$\begin{array}{c}
A = {\rm{Rs }}3000 + {\rm{Rs }}420\\
A = {\rm{Rs }}3420
\end{array}$

Therefore, the simple interest to pay to the bank is equal to $420$.

Note:In such types of questions related to simple interest or compound interest do not take simple interest as the amount paid after 2 years because interest is nothing but extra money. If we use simple interest as the amount paid, then some extra money will be added to the amount and the answer will be wrong. The total amount paid should be the amount and the simple interest.