A sum of money deposit in a bank for a period of 4 year at 8.5% p.a simple interest earns an interest of Rs 850. Find the sum.

Questions : A sum of money deposit in a bank for a period of 4 year at 8.5% p.a simple interest earns an interest of Rs 850. Find the sum.

Answer:  

 The formula for Simple Interest (SI) is:

$$SI = \frac{P \times R \times T}{100}$$

where:

• $SI = 850$ (given)
• $R = 8.5\%$
• $T = 4$ years
• $P$ is the principal amount (sum to be found)

Substituting the values:

$$850 = \frac{P \times 8.5 \times 4}{100}$$ $$850 = \frac{P \times 34}{100}$$ $$P = \frac{850 \times 100}{34}$$ $$P = 2500$$

So, the sum deposited is Rs. 2500.

Additional Information

Here's how to solve this problem:

Understanding Simple Interest

Simple interest is calculated only on the principal amount. The formula for simple interest is:

Interest = Principal * Rate * Time

Where:

• Interest is the amount earned.
• Principal is the initial sum of money.
• Rate is the annual interest rate (as a decimal).
• Time is the duration of the deposit (in years).

Solving for the Principal

We need to rearrange the formula to solve for the principal:

Principal = Interest / (Rate * Time)

Plugging in the Values

• Interest = Rs 850
• Rate = 8.5% = 0.085 (convert percentage to a decimal)
• Time = 4 years

Principal = 850 / (0.085 * 4)

Principal = 850 / 0.34

Principal = Rs 2500

Answer: The sum of money deposited (the principal) was Rs 2500.

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