What sum lent out at simple interest would produce Rs 50 as interest in 2 yrs at 5% p.a?
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Solution!!
The interest, time and rate of interest is given in the question. We have to find the principal.
Interest (I) = Rs 50
Rate of interest (R) = 5%
Time (T) = 2 years
To find the principal, we will use the interest formula.
→ Interest = (P × R × T)/100
50 = (P × 5 × 2)/100
50 × 100 = P × 5 × 2
5000 = P × 5 × 2
5000 = P × 10
5000 ÷ 10 = P
500 = P
P = Rs 500
The sum lent out at simple interest would produce Rs 50 as interest in 2 years at 5% per annum is Rs 500.
In some questions, we are asked to find the amount and to do so, we have a formula.
→ Amount = Principal + Interest
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