Simple Interest Calculation: Finding the Principal Sum
To find the principal sum (the initial amount of money) that earns a specific interest, we use the simple interest formula.
Given Information:
- Interest Earned (I): ₹480
- Time Period (T): 2 years
- Annual Interest Rate (R): 8%
Simple Interest Formula:
The formula for simple interest is:
\( I = \frac{P \times R \times T}{100} \)
Where:
- \(I\) = Simple Interest
- \(P\) = Principal Sum (the amount we need to find)
- \(R\) = Rate of Interest per year
- \(T\) = Time period in years
Calculating the Principal (P):
We need to rearrange the formula to solve for \(P\):
\( P = \frac{I \times 100}{R \times T} \)
Now, substitute the given values into the rearranged formula:
\( P = \frac{480 \times 100}{8 \times 2} \)
Perform the calculation:
- Multiply the interest by 100: \(480 \times 100 = 48000\)
- Multiply the rate by the time: \(8 \times 2 = 16\)
- Divide the result from step 1 by the result from step 2: \(P = \frac{48000}{16}\)
- \(P = 3000\)
Conclusion:
The principal sum that will earn an interest of ₹480 in 2 years at 8% simple interest per year is ₹3000.
Similar Questions
The simple interest on ₹1,280 at 5% p.a. in 3 years is:
A invests ₹8000 and B invests ₹11000 at the same rate of simple interest per annum. If at the end of 3 years, B gets ₹720 more interest than A, then find the rate of simple interest per annum.
A sum of money lent on simple interest becomes \(7\over5\) of itself in 4 years. Find the rate of interest per annum.
What sum will earn a simple interest of ₹480 in 3 years at a 16% per year rate of interest?
Find the simple interest of ₹3,000 as a sum borrowed at a 4% per year rate of interest for 5 years.
- Reeta invests a certain sum of money at a certain rate of simple interest per annum, and the interest she gets is equal to one-fourth of the sum invested. If the time period (in years) of investment is equal to the percentage rate of interest per annum, for how many years did Reeta invest the sum of money?
- How long will it take for ₹1,500 to become ₹2,040 at a rate of 8% per annum simple interest?
- What sum (in ₹) will earn an interest of ₹480 in 2 years at 12% simple interest per year?
- What sum (in ₹) will earn an interest of ₹480 in 2 years at 16% simple interest per year?
- What sum (in ₹) will earn an interest of ₹460 in 4 years at 5% simple interest per year?
Important Questions from Simple Interest
How much time will it take for an amount of Rs. 450 to yield Rs. 81 as interest at 4.5% per annum of simple interest ?
Nirav and Mehul borrowed Rs.4000 and Rs.5000 respectively for 2.5 years at the rate of x% per annum. Mehul paid Rs 125 more interest than Nirav. Find x.
If the interest on a sum of Rs.1200 is more than the interest on Rs.1000 by Rs.120 in three years, then what is the rate of interest per annum?.
The difference between the simple interest received from two banks on Rs. 500 for two years is Rs. 2.50. What is the difference between their rates?
A sum of Rs.1200 becomes Rs.1560 at a rate of simple interest in 3 years. In how many years will the sum of Rs.800 amount to Rs.1120 at the same rate of simple interest?
