Question

Q.2 Write the defination of the following.
1. Principal-
2.Interest -
3. Amount-
4.Rate-​

Answer 1

Answer:

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Step-by-step explanation:

1) “Principal” is a term that has several financial meanings. The most commonly used refers to the original sum of money borrowed in a loan or put into an investment. ... Principal can also refer to an individual party or parties, the owner of a private company, or the chief participant in a transaction.

2) Interest is the amount of money a lender or financial institution receives for lending out money. Interest can also refer to the amount of ownership a stockholder has in a company, usually expressed as a percentage.

3) a quantity of something, especially the total of a thing or things in number, size, value, or extent.

4) The definition of a rate is a quantity measured and compared to another quantity measured (such as a number of miles per hour) or is the cost of something. An example of a rate is being paid $10 per hour. An example of a rate is the price of gas.

a measure, quantity, or frequency, typically one measured against another quantity or measure.

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Answer 2

1. Principal: The money deposited on which the interest is earned or the money borrowed on which the interest is paid is called the principal or the sum.

2. Interest: The extra amount paid while returning the borrowed money is called the interest

3. Amount: The sum of the principal and the interest is called the amount.

4. Rate of interest: The interest on 100 for 1 year is known as the rate per cent per annum. (Per annum means for each year.)

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Example:-

If Somnath pays an interest of 1500 for two years on a sum of Rs.7500. find the rate of interest. We have.

Principal = Rs.7500

Time = 2 years

Rate of Interest = R

Simple interest = Rs.1500

$Therefore, \: S.I = \frac{P \times T \times R}{100} \\ 1500 \: = \: \frac{75 \: \cancel{00} \times 2 \times R}{1 \: \cancel{00}} \\ 1500 = 150R \\ R = 10$

Therefore, rate of interest = 10% P.a.

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