Randhir denotes Rs 5000 to a school, the interest of which is to be used for a awarding 10 scholarships of equal value every year. If the donation earn an interest of 11% per annum, find the value of each scholarship
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Answer:
Given:
Principal amount (P) = Rs 5000
Interest rate (R) = 11%
Number of scholarships (N) = 10
Interest earned in one year = (Principal * Rate) / 100
Interest earned in one year = (5000 * 11) / 100
Interest earned in one year = Rs 550
Now, we divide the interest earned in one year by the number of scholarships to find the value of each scholarship.
Value of each scholarship = Interest earned in one year / Number of scholarships
Value of each scholarship = 550 / 10
Value of each scholarship = Rs 55
Therefore, each scholarship has a value of Rs 55.