The sum required to earn a monthly interest of Rs.1200 at 18% per annum Simple Interset is:
SI = P×R×T
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100
14400(1200×12)=P(?)×18×1
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100
14400= 0.18 P
P = 80000
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Time value of money
exercise 4A
I =₹1200
R=18%
T= 1/12 year
I= P×R×T/100
1200= P×18×1/ 100×12
P= 120000×12 / 18
P =₹80000
I = Po*r*t = $1200.
r = (18%/12)/100% = 0.015 = Monthly % rate expressed as a decimal.
t = 1 Mo.
Po*0.015*1 = 1200.
Po = $80,000.
To find the sum required to earn a monthly interest of Rs. 1200 at an annual interest rate of 18% per annum Simple Interest, we can use the formula for Simple Interest:
Simple Interest (SI) = (Principal amount * Rate * Time) / 100
In this case, we know the Simple Interest (SI) is Rs. 1200 and the Rate is 18% per annum. However, we do not have the time duration.
Since we want to earn a monthly interest, we need to find the time in terms of months. An annual interest rate of 18% can be converted to a monthly interest rate by dividing it by 12 (number of months in a year). So, the monthly interest rate is (18/12)% or 1.5%.
Thus, the formula for monthly interest is:
SI = (Principal amount * Monthly Rate * Time in months) / 100
Now, let's substitute the given values in the formula:
1200 = (Principal amount * 1.5 * Time) / 100
To find the value of the principal amount, we need to rearrange the formula:
Principal amount = (SI * 100) / (Monthly Rate * Time)
Substituting the values:
Principal amount = (1200 * 100) / (1.5 * Time)
To find the exact value of the principal amount, we need to know the time duration (in months) for which the interest is earned. Without that information, it is not possible to determine the exact sum required to earn a monthly interest of Rs. 1200 at 18% per annum Simple Interest.