Question

Simple interest is given by \[I = \dfrac{{PTR}}{{100}}\]. If \[P = Rs.900,T = 2\] years and \[R = 5\% \], find the simple interest.

Answer 1

Hint: We substitute the value of principal amount (P), time period (T) and rate of interest (T) in the formula given in the question. Cancel all the same factors and reduce the term in the solution to the smallest form.

Complete step by step answer:
We are given in the statement of the question that Simple interest is given by the formula \[I = \dfrac{{PTR}}{{100}}\]
Where ‘I’ denote the simple interest, ‘P’ denote the Principal amount, ‘T’ denote the time period and ‘R’ denote the rate of interest.
We are given
Principal amount, \[P = Rs.900\]
Time period, \[T = 2\] years
Rate of interest, \[R = 5\% \]
Substitute the value of P, R and T in the formula given in the question
\[ \Rightarrow I = \dfrac{{900 \times 2 \times 5}}{{100}}\]
Cancel the same factors from numerator and denominator in RHS of the equation
\[ \Rightarrow I = 9 \times 2 \times 5\]
Calculate the product on RHS of the equation
\[ \Rightarrow I = Rs.90\]

\[\therefore \] The value of simple interest is Rs.90

Note:
Students many times make the mistake of thinking of simple interest also as a percentage or rate and write the symbol of percentage along with it. Simple interest is the money obtained from the rate of interest which is applied on the given principal amount over a given period of time.
Also, if writing the formula in terms of r divided by hundred then don’t take the value of r in decimals, just take the numerical value as the percentage part is already converted into fraction in the formula.
If we are given that formula of interest is \[I = PTR\], then we have to take the rate of interest in fraction form where we will take the denominator as 100.