Question

Pratibha borrows ${\text{Rs}}{\text{. 47000}}$ from a finance company to buy her first car. The rate of simple interest is {\text{17% }} and she borrows the money over a ${\text{5}}$ year. Find how much amount Pratibha should repay the finance company at the end of five years.

Answer 1

Here we will use the formula of Simple interest which equals to as below:
${\text{S}}{\text{.I = }}\dfrac{{P \times r \times t}}{{100}}$ where
$P = {\text{Principal}}$,
$r = {\text{rate of interest}}$ and
$t = {\text{time}}$.

Complete step-by-step answer:
Here we will use the formula of Simple interest which equals to as below:
${\text{S}}{\text{.I = }}\dfrac{{P \times r \times t}}{{100}}$ where
$P = {\text{Principal}}$,
$r = {\text{rate of interest}}$ and
$t = {\text{time}}$.
Step by step answer:
Step 1: As per the given information from the question
$P = 47000$,
$r = 17\%$ and
$t = 5{\text{ years}}$.
By substituting these values in the formula
${\text{S}}{\text{.I = }}\dfrac{{P \times r \times t}}{{100}}$ we get:
${\text{S}}{\text{.I = }}\dfrac{{47000 \times 17 \times 5}}{{100}}$
Solving the RHS side of the expression by dividing with
$100$ we get:
$\Rightarrow {\text{S}}{\text{.I = }}470 \times 17 \times 5$
After multiplying the terms in the RHS side of the above expression we get:
$\Rightarrow {\text{S}}{\text{.I = Rs}}{\text{. 39950}}$
Step 2: As we know that the total amount equals the sum of the principal value and the interest applied to it. So, the amount will be as below:
$\Rightarrow {\text{Amount = Principal + S}}{\text{.I}}$
By substituting the values of $P = 47000$ and ${\text{S}}{\text{.I = 39950}}$ in the above expression we get:
$\Rightarrow {\text{Amount = 47000 + 39950}}$
After adding the terms in the RHS side of the above expression we get:
$\Rightarrow {\text{Amount = Rs}}{\text{. 86950}}$

The amount of money Pratibha will repay the finance company at the end of five years will be equals to ${\text{Rs}}{\text{. 86950}}$.

Note:
Students need to remember that in these types of questions we will use the formula of simple interest. Also, the total amount equals the sum of the principal value and the interest applied to it. You should take care while calculating the answer because some students think that the amount we get after calculating simple interest will be the answer which leads to error.