Question

How long will the given principal P take to reach the given maturity value A at the given simple interest rate r
11. P = 150,000; A = 151,000; r = 4%
12. P = 800,000; A = 801,000; r = 3%

Answer 1

Step-by-step explanation:

If an amount of money, P , the principal, is invested for a period of t years at an annual interest rate r, the amount of interest, I , earned is

I=Prt

where

I = interest

P = principal

r = rate

t = time

Interest earned according to this formula is called simple interest.

Answer 2

Answer: For, P = 150,000; A = 151,000; r = 4%, t= $\frac{1}{6}$ years and for  P = 800,000; A = 801,000; r = 3%, t= $\frac{1}{24}$ years.

Step-by-step explanation:

Concept: Simple interest is a way to figure out how much interest will be charged on a sum of money at a specific rate and for a specific duration of time. Contrary to compound interest, where we add the interest of one year's principal to the next year's principal to compute interest, the principal amount under simple interest remains constant.

Procedure: The formula for calculating the simple interest is :

S.I. = P × R × T,

where,

P = Principal, R = Rate of Interest in % per annum, and T = Time ( in years).

Note:

Principal: The principal is the sum that was first invested or borrowed from the bank. P stands for the principal.

Rate: Rate is the interest rate at which the principal sum is granted to someone for a specific period of time; examples of rate interest are 5%, 10%, and 13%. R stands for the interest rate.

Time: The amount of time that the principal is given to someone. T represents time.

Amount: When a borrower repays a bank loan, the term "Amount" refers to the sum of the principal borrowed plus the interest paid. A stands for the amount.

i.e., Amount = Principal + Simple Interest = A = P(1 + RT)

Step 1: Here we are given :

P = 150,000; A = 151,000; r = 4%

Step 2: Putting the given values in the equation, we get,

 $151000=150000*(1+\frac{4*t}{100} )$

⇒ $\frac{151}{150} = 1 +\frac{4*t}{100}$

⇒ $\frac{151}{150} -1=\frac{4*t}{100}$

⇒$\frac{1}{150} =\frac{4*t}{100}$

⇒$t=\frac{1}{6}$ years.

Step 3: Here we are given :

P = 800,000; A = 801,000; r = 3%

Step 4: Putting the values in the equation, we get,

$801000=800000(1+\frac{3*t}{100} )$

⇒$\frac{801}{800} -1 = \frac{3*t}{100}$

⇒$\frac{1}{800} = \frac{3*t}{100}$

⇒$t=\frac{1}{24}$ years.

FInal ans: For, P = 150,000; A = 151,000; r = 4%, t= $\frac{1}{6}$ years and for  P = 800,000; A = 801,000; r = 3%, t= $\frac{1}{24}$ years.

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