Amir deposits $5,000 into a savings account that earns simple interest at 4% per annum. After 3 years, he withdraws all his savings and uses them to buy a refrigerator listed at $8,000. The shop offers a 25% discount on the listed price, and 9% GST is applied to the discounted price. How much more money does Amir need, beyond his total savings, to buy the refrigerator?
Show Worked Solution
Worked Solution
Step 1: Compute the simple interest earned.
Interest = Principal × Rate × Time
Interest = $5,000 × 4/100 × 3 = $5,000 × 0.12 = $600
Step 2: Find Amir's total savings.
Total savings = $5,000 + $600 = $5,600
Step 3: Apply the 25% discount to the listed price.
Discounted price = $8,000 × (1 − 0.25) = $8,000 × 0.75 = $6,000
Step 4: Apply 9% GST to the discounted price.
GST amount = $6,000 × 0.09 = $540
Final price = $6,000 + $540 = $6,540
Step 5: Find the additional amount Amir needs.
$6,540 − $5,600 = $940
Amir needs $940 more than his savings.
Correct answer: $940
Want more questions like this? Superholic Lab has 10,000+ MOE-aligned questions with full worked solutions.
Start Free Trial — 7 Days Free