Question

What will be simple interest for 1 year and 4 months on a sum of Rs. 25800 at the rate of 14% per annum?

Answer 1

Hint: We are given principal, rate and time (to be converted in years), using this we can calculate simple interest by applying its formula:
$S.I={\displaystyle \frac{P\times R\times T}{100}}$ where,
P is principal, R is rate and T is time.

Complete step-by-step answer:
Converting 1 year and 4 months into years:
As 12 months = 1 year
4 months = ${\displaystyle \frac{1}{12}}\times 4$ [By Unitary Method]
 = ${\displaystyle \frac{1}{3}}$years
Therefore, 1 year and 4 months = $1+{\displaystyle \frac{1}{3}}$
=${\displaystyle \frac{4}{3}}$years
Given:
Principal (P) = Rs. 25800
Rate (R) = 14%
Time (T) = 1 year and 4 months
= ${\displaystyle \frac{4}{3}}$ years
Applying the formula of Simple Interest to calculate its value, we get:
$S.I={\displaystyle \frac{P\times R\times T}{100}}$
$$\begin{gathered} S.I={\displaystyle \frac{25800\times 14\times {\displaystyle \frac{4}{3}}}{100}} \\ S.I={\displaystyle \frac{25800\times 14\times 4}{100\times 3}} \\ S.I={\displaystyle \frac{258\times 14\times 4}{3}} \end{gathered}$$
S.I = 4816
Therefore, the simple interest for 1 year and 4 months on a sum of Rs. 25800 at the rate of 14% per annum is Rs. 4816

Note: Per annum means nothing but per year.
Time is always in years when we calculate SI and if not, we apply conversion
To calculate the amount of SI, we use:
Amount = Principal – Interest
Simple Interest is a method to calculate interest on a principal amount (especially when lent), it is preferred as it is according to its name simple and easy to calculate as well as understand.
This is generally used in banking and finance sectors.