Question

Alex has Rs.1,750 in a savings account that earns 5% simple interest per year. How much interest will he earn in 2.5 years​

Answer 1

Answer:

▪︎Given:

$\textsf{Saving amount or principal amount Alex has:}$$\textsf{= Rs. 1750}$

$\textsf{Rate of interest earns per year:}$$\textsf{= 5 percent}$

$\textsf{Time till he earns the interest:}$$\textsf{= 2.5 years}$

▪︎To find:

$\textsf{Amount of interest he will earn}$

▪︎Taken:

Formula to find simple interest:

$\boxed{I=\frac{P×R×T}{100}}$

Where,

I = Total interest Alex will earn

P = Principal

R = Rate of interest

T = Total time the interest earns

▪︎Solution:

$Taken,I=\frac{P×R×T}{100}$

$\Rightarrow{I=\frac{1,750×5×2.5}{100}}$

$\Rightarrow{I=\frac{1,750×5}{40}}$

(Divided 100 ÷ 2.5 = 40)

$\Rightarrow{I=\frac{1,750}{8}}$

(Divided 40 ÷ 5 = 8)

$\Rightarrow{I=218.75}$

(Divided 1,750 ÷ 8 = 218.75)

▪︎Answer:

• Rate of interest he earns = ₹ 218.75

• Total amount he has now = ₹ 1,750 + ₹ 218.75 = ₹1,968.75

▪︎Additional information:

Formula to find the compound interest:

$A=P{(1+\frac{r}{n})}^{nt}$

Where,

A = Final amount

P = Principal

r = Rate of interest

n = Number of time interest applied

t = Total time

To find rate:

$R=\frac{I×100}{P×T}$

To find time:

$T=\frac{I×100}{P×R}$

To find the principal:

$P=\frac{I×100}{R×T}$

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