₹40,000 is invested at 6% interest rate p.a. Find the interest at the end of two years. [2 marks]

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Solution

Principal amount (P) = ₹40,000
Rate of interest (R) = 6%
Time = 2 years

We know that
Simple Interest = $\frac{P r i n c i p a l \times R a t e \times T i m e (y e a r s)}{100}$ [1 mark]

Simple Interest = $\frac{40, 000 \times 6 \times 2}{100}$ = 4,800 [1 mark]

So, an interest of ₹4,800 will be received for the given principal at the given rate of interest and time.

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