If you happen to be viewing the article Mr. Thomas invested an amount of rs. 13,900 divided in two different schemes A and B at the simple interest rate of 14% p.a. and 11% p.a. respectively. If the total amount of simple interest earned in 2 years be Rs. 3508, What was the amount invested in scheme B? ? on the website Math Hello Kitty, there are a couple of convenient ways for you to navigate through the content. You have the option to simply scroll down and leisurely read each section at your own pace. Alternatively, if you’re in a rush or looking for specific information, you can swiftly click on the table of contents provided. This will instantly direct you to the exact section that contains the information you need most urgently.
Learn about Mr. Thomas’s clever investment move! He divided Rs. 13,900 between two schemes, A and B, with interest rates of 14% and 11%. Find out the total simple interest of Rs. 3508 earned in 2 years and the specific amount invested in scheme B.
Mr. Thomas invested an amount of rs. 13,900 divided in two different schemes A and B at the simple interest rate of 14% p.a. and 11% p.a. respectively. If the total amount of simple interest earned in 2 years be Rs. 3508, What was the amount invested in scheme B?
Let x be the amount invested in Scheme B. Then, the amount invested in Scheme A is 13900 – x.
Simple interest earned in Scheme B for 2 years: (x * 11 * 2) / 100 = 22x / 100
Simple interest earned in Scheme A for 2 years: ((13900 – x) * 14 * 2) / 100 = 28(13900 – x) / 100
Total interest earned: 22x / 100 + 28(13900 – x) / 100 = 3508
Combining like terms: (22x + 389200 – 28x) / 100 = 3508
Simplifying: -6x + 389200 = 350800
Solving for x: x = 6400
Therefore, the amount invested in Scheme B is Rs. 6400.
What is SImple Interest?
Simple interest is a method of calculating the interest charged on a loan or earned on an investment over a specific period of time. It’s calculated based on only the initial principal amount, unlike compound interest, which considers previously earned interest in its calculations. Here’s a breakdown of the key points:
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Key features of simple interest:
- Formula: Simple interest is calculated using the following formula: Simple Interest = Principal × Interest Rate × Time
- Principal: The initial amount borrowed or invested.
- Interest Rate: The annual interest rate expressed as a decimal (e.g., 5% = 0.05).
- Time: The length of the loan or investment period in years.
- No compounding: In simple interest, interest is only earned on the original principal amount. Interest earned in previous periods is not added to the principal for future interest calculations. This means the interest earned grows linearly over time.
- Applications: Simple interest is often used for short-term loans, savings accounts, and other financial instruments where interest accrues regularly but not frequently.
Examples:
- You borrow $1,000 for 2 years at a 5% interest rate. The simple interest would be: Simple Interest = $1,000 × 0.05 × 2 = $100.
- You deposit $500 in a savings account with a 2% annual interest rate. After 1 year, you would earn $10 in simple interest: Simple Interest = $500 × 0.02 × 1 = $10.
Comparison to compound interest:
Simple interest is generally easier to calculate than compound interest, but it also tends to result in lower overall interest earnings or costs compared to compound interest over longer periods.
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