Question

Suppose Diya invests Rs. 1000 in a bank. The bank says “10% interest”. It means the bank will pay an amount increased by 10% after 1 year.
Interest = Rs. 1000 × 10% = Rs. 100. So, the increased amount after one year = Rs. 1000 + Rs. 100 = Rs. 1100.
What if Diya invests the money for 2 years?.
​

Answer 1

Step-by-step explanation:

Interest for first year = Rs. 1000 × 10% = Rs. 100

Interest for second year = Rs. 1000 × 10% = Rs. 100

Total interest = (Rs. 1000 × 10%) + (Rs. 1000 × 10%) = Rs. 1000 × 10% × 2 = Rs. 200

Here, Rs. 1000 is the Principal (P), 10% is the percentage increase or interest rate (R), 2 is the time period (T).

Therefore, the general formula for simple interest (S.I.) is SI = P × R × T/100.

Now, the total money that Diya will get after 2 years will be Rs. 1000 + Rs. 200 = Rs. 1200. The sum of money which Diya will get back is called amount.

So, Amount = Principal + Interest.

Answer 2

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