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Interest – An amount charged for the use of money
Principal – The amount of money borrowed
Term – The length of the transaction period; it starts on the origin date and ends on the maturity date
Maturity value – the amount of money received at the end of the term; the sum of the principal and the interest earned
Simple interest – A type of interest wherein only the original principal earns interest for the duration of the term
Interest = Principal × Rate × Time
Example 1
Find the interest earned after 3 years if ₹ 12,000 is deposited in a savings account which earns 5% simple interest.
Solution :
I = PRT
I = 12000x .05x 3
I = ₹ 1800
Example 2
If you invested ₹ 200.00 in an account that paid simple interest of 4%, find the maturity value after 1.5 — years.
Solution
S = Principal + Interest
S= P+I
S = P + PRT
S = 200 + 200x.04x1.5
S=200+ 12
S = ₹ 212
When invested at an annual interest rate of 6% an account earned ₹180.00 of simple interest in one year. How much money was originally invested in the account ?
A savings account is set up so that the simple interest on the investment is moved into a separate account at the end Of each year. If an Investment of ₹ 7,000 accumulate ₹ 910 Of interest in the account after 2 years, what was the annual simple interest rate on the saving account ?
Mr. Anand invested an amount of ₹ 13,900 divided in two different schemes A and B at the simple interest rate of 14% p.a. and 11% p.a. respectively. If the total amount of simple interest earned in 2 years be Rs. 3508, what was the amount invested in Scheme B?
Asmita took a loan of ₹ 1200 with simple interest for as many years as the rate of interest. If she paid ₹ 432 as interest at the end of the loan period, what was the rate of interest?
There was simple interest of ₹ 4016.25 on a principal amount at the rate of 9%p.a. in 5 years. Find the principal amount