Simple Interest
Category : 7th Class
Simple Interest
In the case of simple interest, we calculate interest paid by borrower over certain period of time without changing its principle.
Calculate the simple interest on a sum of $1200 at the rate of 5 % per annum or two years.
Solution:
The following steps are to be followed
Step 1: The interest for first year when
P =$ 1200, R = 5 % and T = 1 year
S.I. \[=\frac{P\times R\times T}{100}=\frac{1200\times 5\times 1}{100}=\$60\]
Therefore, interest for the first year is $ 60.
Step 2: Interest for the second year
P = $ 1200, R = 5 % and T = 1 year
S.I. \[=\frac{P\times R\times T}{100}=\frac{1200\times 5\times 1}{100}=\$60\]
Therefore, interest for the second year is $60.
Total interest paid by borrower after 2 years =$ 60 + $ 60 = $ 120.
You need to login to perform this action.
You will be redirected in
3 sec
