Question

Prabhaas wanted to make a Swimming Pool in his Plot. He borrowed rupees 70500 from a bank at an interest rate of 6 p.c.p.a. How much interest will he have to pay to the bank at the end of the year ?

Answer 1

Let us suppose that the interest on the principal of ₹70500 is x.

On principal ₹100, the interest is ₹12.

We shall take the ratio of interest to principal, write it in two forms and obtain an equation.

$\frac{x}{70500}=\frac{6}{100}$

$x=\frac{6}{100}\times 70500=4230$

Hence, Prabhas will have to return 4230 rupees as interest to the bank at the end of the year.