Answer:
1. Robert deposits $ 3000 in State Bank of India for 3 year which earn him an interest of 8%.What is the amount he gets after 1 year, 2 years and 3 years?
Step-by-step explanation:
Solution:
In every $ 100, Robert gets $ 8.
(Since rate is 8% → 8 for every 100)
Therefore, for $ 1 he gets = $ 8/100
And for $ 2000 he gets = 3000 x 8/100
= $ 240
Simple Interest for 1 year = $ 240.
Simple Interest for 2 year = $ 240 x 2
= $ 480
Simple Interest for 3 year = $ 240 x 3
= $ 720
Therefore, Amount after 1 year = Principal (P) + Simple Interest (SI)
= 3000 + 240
= $ 3240
Amount after 2 years = Principal (P) + Simple Interest (SI)
= 3000 + 480
= $ 3480
Amount after 3 years = Principal (P) + Simple Interest (SI)
= 3000 + 720 = $ 3720
We observe from the above example that, the Interest cannot be calculated without Principal, Rate and Time.
Therefore, we can conclude that Simple Interest (S.I.) depends upon:
(i) Principal (P)
(ii) Rate (R)
(iii) Time (T)
And therefore, the formula for calculating the simple interest is
Simple Interest (SI) = {Principal (P) × Rate (R) × Time (T)}/100
Amount (A) = Principal (P) + Interest (I)
Principal (P) = Amount (A) – Interest (I)
Interest (I) = Amount (A) – Principal
