Question

Suma deposited 25000 rupees in a bank at 6% interest annually. What is the amount of interest after one year? How much will she get back after one year?
A). 1500, 26500
B). 1000, 26000
C). 1800, 26800
D). None of these

Answer 1

Hint: In this case we have to find the interest incurred on the amount deposited initially in the bank and therefore add the interest to the principal amount to get the total amount she will get after one year.

Complete step by step solution:
In this case, Suma had initially deposited Rs.25000 in the bank. Thus, in this case, the principal amount should be Rs.25000. Also, it is given that the rate of interest is 6% annually. We can use the following formula
Total interest obtained after one year= Principal amount $\times \dfrac{1}{100}$$\times$ Annual percentage rate of interest………….(1.1)
Now, in this case, Principal amount=Rs.25000 and Annual Percentage rate of interest=6%
Therefore, using these values in equation (1.1), we get
\[\text{Total interest obtained after one year}=\text{ Rs}\text{.25000}\times \dfrac{6}{100}=\text{Rs}.1500\]
The total amount obtained after one year should be the sum of the principal amount and the amount of obtained interest. Thus,
The total amount obtained after one year = Rs.25000+Rs.1500 = Rs.26500
Therefore, their interest and the total amount obtained are Rs.1500 and Rs.26500 respectively which matches an answer as an option (a). Thus, option (a) is the correct answer to this question.

Note: We should be careful to multiply $\dfrac{1}{100}$ in equation 1.1 as the rate of interest is given in percentage not a simple number. Students must not get confused and find the amount using the formula = Principal amount $\times \dfrac{1}{100}$$\times$ Annual percentage rate of interest. This represents the interest on the principal amount and we must add the principal amount to this interest in order to get the amount that Suma would get back after a year.