To calculate the simple interest on a principal amount over a certain period of time at a given rate of interest, we can use the formula for simple interest:
[tex]\[ \text{Simple Interest} (SI) = \frac{\text{Principal} \times \text{Rate} \times \text{Time}}{100} \][/tex]
Given the values:
- Principal ([tex]\(P\)[/tex]) = [tex]\(50,000\)[/tex]
- Time ([tex]\(T\)[/tex]) = [tex]\(5\)[/tex] years
- Rate ([tex]\(R\)[/tex]) = [tex]\(5\%\)[/tex] per annum
Let's plug these values into the formula step-by-step:
1. Multiply the Principal by the Rate:
[tex]\[ P \times R = 50,000 \times 5 = 250,000 \][/tex]
2. Multiply the result by the Time:
[tex]\[ 250,000 \times 5 = 1,250,000 \][/tex]
3. Divide by 100 to get the Simple Interest:
[tex]\[ \text{SI} = \frac{1,250,000}{100} = 12,500 \][/tex]
So, the simple interest on [tex]\(50,000\)[/tex] for 5 years at the rate of [tex]\(5\%\)[/tex] per annum is [tex]\(12,500\)[/tex].
