In simple term the word Simple Interest refers just the amount of money paid on a loan. It's the easiest type of interest or most basic type of interest. In order to understand how various types of transactions work, it helps to have a complete understand the terms used.
For example: you may pay interest on a car loan, and it is very much necessary and important to understand how interest works. Better yet, your bank may be paying you interest on your deposits – and you can maximize your earnings by knowing more about interest.
Here S.I refers to simple interest.
Formula for S.I =
If the investment earns $888.00 per year,how much was invested at each rate?
Answer :
Simple interest = PTR
Where P is the Principal. T is the time and R is the rate of interest
SI = 680
Therefore
so, 3,000 is invested at 4% and 8,000 is the principal invested at 7%
For example: you may pay interest on a car loan, and it is very much necessary and important to understand how interest works. Better yet, your bank may be paying you interest on your deposits – and you can maximize your earnings by knowing more about interest.
Here S.I refers to simple interest.
Formula for S.I =
P x T x R 100Question: If 11,000,00 dollars is invested. Part of the 11,000,00 is invested 4% and the rest at 7%.
If the investment earns $888.00 per year,how much was invested at each rate?
Answer :
Principal time rate of interest simple interest earned x 1 4% 0.04x 1000-x 1 7% .07(11000-x)
Simple interest = PTR
Where P is the Principal. T is the time and R is the rate of interest
SI = 680
Therefore
0.04x + 0.07(11000-x) = 680
0.04x + 770 - 0.07x = 680
-0.03x + 770 = 680
-0.03x = 680 - 770
------ ----------
-0.03 -0.03
x = 90/0.03
x = 3,000
x = 3,000so, 3,000 is invested at 4% and 8,000 is the principal invested at 7%
