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
- A sum of ₹ 2,000, invested at the rate of 8.5% simple interest per annum for 6 years will yield an interest of:
- ₹ $x$ invested at 9% simple interest per annum for 5 years yields the same interest as that on ₹ $y$ invested at 6.25% simple interest per annum for 8 years. Find $x : y$.
Important Questions from Simple Interest
If ₹12,800 is invested in a bank for 5 years at the rate of 9% per annum simple interest. what amount is returned by the bank?
Somu has borrowed ₹10,000 from a money lender with simple interest at a rate of 7% half yearly. How much amount will he pay to the money lender after 3 years?
Find the Simple interest on Rs. 2,400 from 20 March 2019 to 31 may 2019 at \(6{1 \over 4}\) % rate?
If the simple interest for five years is equal is 35% of the principal, that rate of interest is:
A sum fetched a simple interest of Rs. 3,040 at the rate of 8% p.a in 5 years. what is the sum?
