Question

Samata deposited Rs. 15,00,000 in a fixed account of Nepal Bank Limited for 5 years at 11% simple interest. If she has to pay 5% income tax on the interest received by her.

1. How much does she get interest after reducing income tax for 5 years? Find it. 2. How much does the bank provide her after 5 years? Find it.​

Answer 1

Explanation:

1. The simple interest earned by Samata in 5 years is:

SI = P * R * T

where P = Rs. 15,00,000, R = 11%, and T = 5 years

SI = 15,00,000 * 11/100 * 5

SI = Rs. 8,25,000

The income tax on the interest received by Samata is 5% of the interest earned, which is:

IT = 5/100 * 8,25,000

IT = Rs. 41,250

Therefore, the amount of interest Samata gets after reducing income tax for 5 years is:

Interest = SI - IT

Interest = 8,25,000 - 41,250

Interest = Rs. 7,83,750

2. The bank provides Samata with the principal amount plus the interest earned, which is:

Amount = P + SI

Amount = 15,00,000 + 8,25,000

Amount = Rs. 23,25,000

Therefore, the bank provides Samata with Rs. 23,25,000 after 5 years.