Question

Ramya borrowed a loan from a bank for buying a computer. After 4 years she paid Rs. 26,640 and settled the accounts. If the rate of interest is 12% per annum, what was the sum she borrowed?

Answer 1

Hint: Here we will first assume the principal value to be x and then we will use the given values and the formula of simple interest to find the value of the principal.
The simple interest is given by:-
\[S.I = \dfrac{{P \times R \times T}}{{100}}\]
Where, SI is the interest
 P is the principal amount
R is the rate of interest
T is the time period

Complete step-by-step answer:
Let the principal value be x.
It is given that, Rs. 26,640 is the interest paid after 4 years of time and the rate of interest charged is 12%
Therefore, SI = 26640
R = 12
T = 4
Now we know that the simple interest is given by:-
\[S.I = \dfrac{{P \times R \times T}}{{100}}\]
Where, SI is the interest
 P is the principal amount
R is the rate of interest
T is the time period
Putting in the values we get:-
\[26640 = \dfrac{{x \times 12 \times 4}}{{100}}\]
Simplifying it further we get:-
\[26640 = \dfrac{{x \times 48}}{{100}}\]
Solving for x we get:-
\[x = \dfrac{{22640 \times 100}}{{48}}\]
Solving it further we get:-
\[x = 55500\]

Hence the principal amount is Rs. 55500.

Note: Simple interest is the interest which is charged on borrowing the money or a loan.
Here students should note that since the rate of interest is given in percentage therefore, we have divided by 100 in the formula of simple interest.