A sum of Rs. 2000 is lent out at 10% per annum simple interest. What is the difference between the interest earned in the 6th year and the 7th year?
Question
A sum of Rs. 2000 is lent out at 10% per annum simple interest. What is the difference between the interest earned in the 6th year and the 7th year?
Solution
In simple interest, the interest is calculated on the initial principal amount. It means the interest remains the same every year.
The formula for simple interest is I = PRT/100, where:
- I is the interest
- P is the principal amount (the initial amount of money)
- R is the rate of interest per year
- T is the time the money is invested for in years
Given:
- P = Rs. 2000
- R = 10% per annum
We need to find the difference in interest between the 6th and 7th year. But since the interest is the same every year in simple interest, the difference will be zero.
So, the difference between the interest earned in the 6th year and the 7th year is Rs. 0.
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