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,

$Simple \: Interest = \frac{P×T×R}{100} \:$
$P=RS. \: \: 75000 \:$
$T=3 \: months$
But remember that the in years (per annum).

Converting 3 months to years, we have,

$T = \frac{3}{12} = \frac{1}{4} \: years$


$R= 4 \frac{1}{4} = \frac{17}{4}$

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

$Simple \: Interest =RS. \: \frac{75000× \frac{1}{4} × \frac{17}{4} }{100} \:$


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