**RATIO, PROFIT AND LOSS**

**Ratio**

Simple Interest

Calculate simple interest

The amount of money charged when a person borrows money e. g from a bank is called interest (I)

The amount of money borrowed is called principle (P)

To calculate interest, we use interest rate (R) given as a percentage and is usually taken per year or per annum (p.a)

Example 6

Calculate the simple interest charged on the following

850, 000/− at 15% per annum for 9 months

200, 000/− at 8% per annum for 2 years

**Solution**

Real Life Problems Related to Simple Interest

Solve real life problems related to simple interest

Example 7

Mrs.

Mihambo deposited money in CRDB bank for 3 years and 4 months. A t the

end of this time she earned a simple interest of 87, 750/− at 4.5% per

annum. How much had she deposited in the bank?

**Solution**

Given I = 87, 750/− R = 4.5% % T = 3 years and 4 months

Change months to years