# CLASS-5SIMPLE INTEREST - WORD PROBLEM

SIMPLE INTEREST - WORD PROBLEM -

Example.1) Mr. Goldy took loan of \$ 60,000 to construct a house at 8 % per annum. He repaid the loan after 10 years. How much interest did he pay?

Ans.) Principal (P) amount of loan taken by Mr. Goldy = \$ 60,000 Rate of Interest (R) on loan paid by Mr. Goldy = 8 %

Time (T) taken by Mr. Gupta to repay back the loan = 10 years

60000 × 8 × 10

Interest (S.I.) paid by Mr. Goldy on the loan = \$ -----------------

100

[60000 and 100 have the common factor 100]

= \$ (600 × 8 × 10)

= \$ 48000        (Ans.)

2) Mr. Michel borrows \$ 2500 from a bank at 10 % per annum. What

1

interest must he pay to the bank if he repays the loan in (i) 1 -----

2

years, (ii) 6 months (iii) 3 years 9 months?

Ans.)

i) Principal (P) amount borrowed by Mr. Michel = \$ 2500 Rate of Interest (R) paid by Mr. Michel = 10 %

1

Time (T) taken by Mr. Madan to repay back the loan = 1 ------ years

2

[Convert the mixed number into improper fraction]

(1 × 2) + 1

= ------------- years

2

1

=  --------- years

2

2500 × 10 × 3

Interest (S.I.) paid by Mr. Michel on the loan = \$ ------------------

100 × 2

[25000 and 100 have the common factor 100 & 10 and 2 have the common factor 2]

25 × 5 × 3

= \$ --------------

1 × 1

= \$ 375           (Ans.)

ii)  Principal (P) amount borrowed by Mr.Michel = \$ 2500 Rate of Interest (R) paid by Mr.Michel = 10 %

Time (T) taken by Mr.Michel to repay back the loan = 6 months

6

= ------ years   [Since, 1 year = 12 months]

12

1

= ------

2     [6 and 12 have the common factor 6]

2500 × 10 × 1

Interest (S.I.) paid by Mr.Michel on the loan = \$ ----------------

100 × 2

[25000 and 100 have the common factor 100 & 10 and 2 have the common factor 2]

25 × 5 × 1

= \$ --------------

1 × 1 × 1

= \$ 125     (Ans.)

iii) Principal (P) amount borrowed by Mr.Michel = \$ 2500 Rate of Interest (R) paid by Mr.Michel = 10 %

Time (T) taken by Mr.Michel to repay back the loan = 3 years 9 months

9

=  3 ------ years  [Since, 1 year = 12 months]

12

3

= 3 ----- years

4       [9 and 12 have the common factor 3]

(3 × 4) + 3

= ------------- years

4

[Convert the mixed number into improper fraction]

15

= -------

4

2500 × 10 × 15

Interest (S.I.) paid by Mr.Michel on the loan = \$ -----------------

100 × 4

[2500 and 100 have the common factor 100, 10 and 4 have the common factor 2]

25 × 5 × 15

= \$ ---------------                                                                                                                                                     1 × 2 × 1

= \$ 937.5        (Ans.)