Question

Vineet deposited Rs 15,600 in a fixed deposit at simple interest at the rate of 10 percent after every second year he converts his interest into deposits. His interest in the fourth year is-

Answer 1

Hint: Now we know that the money deposited is the principal amount and the rate of interest is also given. Hence we will first calculate the interest received after 2 years with the help of formula $SI=\dfrac{p\times r\times t}{100}$ . Hence we have SI after two years. Now we know that Vineet converts his interest into deposits hence the new principal amount is P + SI. Now again with this new principle amount we will calculate the interest after 2 years by the same formula. Hence we can find the interest after 4 years.

Complete step by step solution:
Now we know that Vineet deposits Rs 15,600 in fixed deposit.
Hence we have the principal amount is 15,600.
Now the rate of interest is given as 10 percent.
Let us first calculate the interest received after 2 years.
Now we know that simple interest is given by $\dfrac{P\times r\times t}{100}$ where P is principle, r is rate of interest and t is time period in years.
Hence substituting the values we get,
$SI=\dfrac{15,600\times 10\times 2}{100}=3120.$
Hence the interest after 2 years is 3120 Rs.
Now we Vineet converts his interest into deposits after 2 years.
Hence after 2 years the principal amount is 15,600 + 3120 = 18720.
Now we have P = 18,720, r = 10 and again t = 2 years.
Hence the simple interest will be given as
$\Rightarrow SI=\dfrac{18720\times 10\times 2}{100}=3744$
Hence the interest received after 2 years is 3744 Rs.

Note: Now note that the interest here is 10 percent. Now since r is in percentage we write it as $\dfrac{r}{100}$ and hence the formula is also written as $P\times r\times t$ also while solving the problems of interest always note that the time must be in years. If the time is not in years then we convert it before substituting it to the formula.