Question

how much simple interest will charged by the bank for a loan of RS.75000 for 3 months if rate is 4 1/4% per annum?

Answer 1

The simple interest is calculated using the formula,


`Simple \: Interest = (P×T×R)/(100) \:`

`P=RS. \: \: 75000 \:`

`T=3 \: months`
But remember that the in years (per annum).

Converting 3 months to years, we have,


`T = (3)/(12) = (1)/(4) \: years`



`R= 4 (1)/(4) = (17)/(4)`

Now let us plug in all these values into the simple interest formula,


`Simple \: Interest =RS. \: (75000× (1)/(4) × (17)/(4) )/(100) \:`



`Simple \: Interest = \:RS. \: \: 796.875`