you tell your dad that you want ₹800 as pocket - money every month. he can deposit some money in the bank…
you tell your dad that you want ₹800 as pocket - money every month. he can deposit some money in the bank such that the interest he gets will be equal to the money you need. his bank offers him an interest rate of 6% per annum. how much money should he deposit in the bank?
Answer
Explanation:
Step1: Calculate annual pocket - money
The monthly pocket - money is ₹800. So the annual pocket - money (which is the annual interest needed) is $800\times12 = 9600$ rupees.
Step2: Use the simple - interest formula
The simple - interest formula is $I = Prt$, where $I$ is the interest, $P$ is the principal amount (the amount to be deposited), $r$ is the annual interest rate (in decimal form), and $t$ is the time in years. Here, $I = 9600$, $r=0.06$ (since $6%=0.06$) and $t = 1$ year. We need to find $P$. Rearranging the formula $P=\frac{I}{rt}$. Substituting the values, we get $P=\frac{9600}{0.06\times1}$.
Step3: Calculate the principal amount
$P=\frac{9600}{0.06}=160000$ rupees.
Answer:
160000