Mr. Kumar invests ₹15,000 in a bank account that offers a simple interest rate of 8% per annum. What will be the total amount after 5 years, including the principal?
Question
Mr. Kumar invests ₹15,000 in a bank account that offers a simple interest rate of 8% per annum. What will be the total amount after 5 years, including the principal?
Solution
To calculate the total amount after 5 years, we need to first calculate the simple interest and then add it to the principal amount.
Step 1: Calculate the Simple Interest The formula for simple interest is I = PRT/100, where:
- P is the principal amount (₹15,000 in this case)
- R is the rate of interest (8% per annum in this case)
- T is the time in years (5 years in this case)
So, I = (15000 * 8 * 5) / 100 = ₹6000
Step 2: Calculate the Total Amount The total amount in the account after 5 years will be the sum of the principal and the interest.
So, Total Amount = Principal + Interest = ₹15000 + ₹6000 = ₹21000
Therefore, the total amount in Mr. Kumar's account after 5 years, including the principal, will be ₹21000.
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